Why the Audit 

Was Done 

The Commission audits 

each host committee or 

municipal fund that 

represents a city where a 

publicly financed 

nominating convention is 

held. The audit seeks to 

determine ifthe 

committee has materially 

complied with the 

prohibitions and 

disclosure requirements 

ofthe election law.' 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

Report of the 

Audit Division on the 

Minneapolis Saint Paul 2008 

Host Committee, Inc. 

April 19, 2007 - December 31, 2008 

About the Committee (p. 2)
 

The Minneapolis Saint Paul 2008 Host Committee, Inc.,
 

headquartered in Saint Paul, Minnesota, is the committee
 

responsible for hosting the 2008 Republican National
 

Convention. For more information, see chart on the Committee
 

Organization, p. 2.
 

Financial Activity (p. 2) 

•	 Receipts 

o	 Contributions to Defray Convention $ 61,272,922 

Expenses 

o	 Refunds, Rebates, Returns of Deposits 2,927,865 

Relating to Convention Expenses 

o	 Other Receipts 1,093,775 

o	 Total Receipts $ 65,294,562 

•	 Disbursements 

o	 Convention Expenses $ 58,733,160 

o	 Other Disbursements 1,089,830 

o	 Total Disbursements $ 59,822,990 

Finding and Recommendation (p. 3) 

•	 Reporting ofIn-Kind Contributions 

I 11 CFR §9008.54. 
Table of Contents 

Page 

Part I. Background
 

Authority for Audit 1
 

Scope of Audit 1
 

Inventory of Committee Records 1
 

Part II. Overview of Committee
 

Committee Organization 2
 

Overview of Financial Activity 2
 

Part III. Summary 

Finding and Recommendation 3
 

Part IV. Finding and Recommendation 

Reporting of In-Kind Contributions 4
 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the Minneapolis Saint Paul 2008 Host Committee, Inc., 

(MSPH), undertaken by the Audit Division of the Federal Election Commission (the 

Commission) as mandated by Section 9008.54 of Title 11 of the Code of Federal 

Regulations. That section states the Commission shall conduct an examination and audit of 

each host committee registered under 11 CFR §9008.51. 

Scope of Audit 

This audit examined: 

1. The receipt of contributions from prohibited sources. 

2. The disclosure of contributions and other receipts. 

3. The disclosure and nature of disbursements. 

4. The disclosure of debts and obligations. 

5. The completeness of records. 

6. The consistency between reported figures and bank records. 

7. Other committee operations necessary to the review. 

Inventory of Committee Records 

The Audit staff routinely conducts an inventory of committee records before it begins the 

audit fieldwork. MSPH's records were materially complete and the fieldwork began 

immediately. 
2 

Part II 

Overview of Committee 

Committee Organization 

Important Dates Minneapolis Saint Paul 2008 Host 

Committee, Inc. 

• Date of Registration January 26,2007 

• Audit Coverage April 19, 2007 - December 31, 2008 

Headquarters Saint Paul, Minnesota 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Four accounts - Three checking and one 

investment 

Treasurer 

• Treasurer When Audit Was Conducted Jeff Larson 

• Treasurer During Period Covered by Audit Jeff Larson 

Management Information 

• Attended FEC Campaign Finance Seminar No 

• Used Commonly Available Campaign 

Management Software Package 

No - Proprietary Software 

•	 Who Handled Accounting, Recordkeeping Paid Staff 

Tasks, and Other Day-to-Day Operations 

Overview of Financial Activity 

(Audited Amounts) 

Cash on hand em April 19, 2007 $0 

Receipts 

0 Contributions to Defray Convention Expenses $ 61,272,922 

0 Refunds, Rebates, Returns of Deposits Relating to 

Convention Expenses 

2,927,865 

0 Other Receipts 1,093,775 

Total Receipts $ 65,294,562 

Disbursements 

0 Convention Expenses $ 58,733,160 

0 Other Disbursements 1,089,830 

Total Disbursements $ 59,822,990 

Cash on hand @ December 31,2008 $ 5,471,572 
3 

Part III 

Summary 

Finding and Recommendation 

Reporting of In-Kind Contributions 

The Audit staff identified seven in-kind contributions totaling $2,834,169 that were not 

initially reported by MSPH; but were disclosed as memo entries on amended reports filed 

subsequent to receipt ofthe audit notification letter. In addition, in-kind contributions 

totaling $11,264,277, which includes the $2,834,169 discussed above, were disclosed as 

memo entries and were not included in reported totals for receipts and disbursements. 

,MSPH has amended its reports to correct these reporting errors. In response to the 

preliminary audit report, MSPH stated it has materially complied with the disclosure 

requirements for in-kind contributions as well as all ofthe Audit staffs recommendations 

and that no further action should be taken. (For more detail, see p. 4) 
4 

Part IV
 

Finding and Recommendation
 

I Reporting of In-Kind Contributions 

Summary 

The Audit staff identified seven in-kind contributions totaling $2,834,169 that were not 

initially reported by MSPH; but were disclosed as memo entries on amended reports filed 

subsequent to receipt of the audit notification letter. In addition, in-kind contributions 

totaling $11,264,277, which includes the $2,834,169 discussed above, were disclosed as 

memo entries and were not included in reported totals for receipts and disbursements. 

MSPH has amended its reports to correct these reporting errors. In response to the 

preliminary audit report, MSPH stated it has materially complied with the disclosure 

requirements for in-kind contributions as well as all of the Audit staffs recommendations 

and that no further action should be taken. 

Legal Standard 

Contents of Reports. Each report must disclose: 

•	 The amount of cash on hand at the beginning and end ofthe reporting period; 

•	 The total amount of receipts for the reporting period and for the calendar year; 

•	 The total amount of disbursements for the reporting period and for the calendar year; 

and 

•	 Certain transactions that require itemization on Schedule A (Itemized Receipts), 

Schedule B (Itemized Disbursements). 2 U.S.c. §434(b)(I), (2), (3) and (4). 

•	 In addition, each in-kind contribution shall be reported as a contribution and an 

expenditure in accordance with 11 CFR §104.3(a) and (b). 

Facts and Analysis 

As a result of our review of all in-kind contributions, the Audit staff identified seven in-kind 

contributions, totaling $2,834,169, which had not been included in reported totals, nor 

disclosed on Schedule A and Schedule B, as required. MSPH amended its report on 

February 11,2009, subsequent to receipt of the audit notification letter but prior to the start 

of audit fieldwork. This amended report materially disclosed on Schedule A and Schedule B 

the omitted in-kind contributions as memo entries. In a response submitted subsequent to 

the exit conference, MSPH representatives stated that the amended report was self initiated 

based upon its internal due diligence which encompassed an ongoing review of 

documentation in an effort to fully and accurately comply with its disclosure responsibilities. 

In addition, in-kind contributions totaling $11,264,277, which includes the $2,834,169 

discussed above, were disclosed as memo entries on Schedule A and Schedule B but were 

not included in reported totals for receipts and disbursements. 

The Audit staff recommended at the exit conference that MSPH amend its reports to include 

all in-kind contributions ($11,264,277) in reported receipt and disbursement totals and not as 

memo entries. MSPH complied with the Audit staffs recommendation by filing amended 

reports on April 13,2009, (October Post Convention Report) and April 15, 2009, (Year End 
5 

Report). The amended reports accurately include the in-kind contributions in reported totals 

for receipts and disbursements and properly itemize them on Schedule A and Schedule B. 

In addition, MSPH's response stated that it believed it had satisfied the Audit staff's postfield work inquiries and has filed the appropriate amendments to its Federal Election 

Commission reports. 

Preliminary Audit Report Recommendation and Committee Response 

The Audit staff recommended that MSPH provide any further comments it considered 

relevant to this matter. 

MSPH's response stated that of the seven in-kind contributions ($2,834,169) identified by 

the Audit staff as not being reported, four of those donors were in fact timely reported, 

accurately reporting the goods and services provided by those donors. MSPH noted that an 

important factor to consider is that the post convention report was required to be expedited 

under 11 CFR §9008.5l(b)(I) due to the timing ofthe convention itself. Based upon 

additional information later obtained by MSPH, the valuation for each ofthese four 

contributions was modified and disclosed on an amended report filed February 11, 2009 to 

accurately reflect the value ofthese donations. These amendments were self initiated and 

reflected the due diligence by MSPH to conduct its own internal review and final accounting 

which included its effort to determine the total actual value of these in-kind contributions. 

The response continued that it is important to note that these in-kind contributions were not 

received as one distinct and single transaction but were the result of multiple transactions 

over an extended period oftime. The remaining three in-kind contributions were disclosed 

by amended report filed April, 2009. 

With regard to the initial disclosure of in-kind contributions as memo entries, MSHP 

believed it had materially satisfied its reporting obligation. These contributions were 

readily identified as in-kind contributions and did not artificially inflate reported totals. In 

its effort to be fully cooperative and to be fully transparent, MSPH complied with the Audit 

staff's recommendation. 

MSHP's response concluded that it had materially complied with its disclosure requirements 

in reporting in-kind contributions, had complied with all ofthe Audit staff's 

recommendations and suggested that no further action should be taken. 

The Audit staff concurs that MSHP has materially complied with the Audit staff's 

recommendation.