Interim Audit Report of the Audit 

Division on the New Hampshire 

Republican State Committee 

January 1, 2007 - December 31, 2008 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

politicd committee that is 

required to file reports 

under the Federal Election 

Campaign Act (tiie Act). 

The Commission 

generally conducts such 

audits when a committee 

appears not to have met 

the threshold 

requirements for 

substantid compliance 

witii tiie Act.* The audit 

determines whether the 

conunittee complied with 

the limitations, 

prohibitions and 

disclosure requirements of 

the Act. 

Future Action 

The Conunission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in tiiis 

report. 

About the Committee (p. 2) 

The New Hampshire Republican State Committee is a state party 

conunittee headquartered in Concord, New Hampshire. For more 

information, see the chart on the Committee Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals 

o Contributions from Other 

Political Committees 

o Transfers from Affiliated/Otiier 

Party Committees 

o Transfers from Non-federal 

Account 

o Offsets/Other Federd Receipts 

Total Receipts 

• Disbursements 

o Other Federal Operating 

Expenditures 

o Refunds/Other Disbursements 

o Federal Election Activity 

o Transfers to Affiliated/Otiier 

Party Committees 

Total Disbursements 

$ 423,842 

295,028 

1,539.740 

15,994 

5,907 

$2,280,511 

$ 684,072 

5,461 

1,397,762 

176,375 

$ 2,263,670 

Findings and Recommendations (p. 3) 

• Misstatement of Financid Activity (Finding 1) 

• Reporting of Debts and Obligations (Finding 2) 

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

Audit Division on the 

New Hampshire Republican State 

Committee 

January 1, 2007 - December 31, 2008 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Limitations 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Smnmaries 

Findings and Reconunendations 3 

Part IV. Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 4 

Finding 2. Reporting of Debts and Obligations 6 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the New Hampshire Republican State Committee 

(NHRSC), undertaken by the Audit Division of the Federal Election Conunission (tiie 

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 conunittee 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 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. 2 U.S.C. §438(b). 

i 

Scope of Audit { 

Following Commission approved procedures, the Audit staff evaluated various risk 

factors and as a result, this audit examined: 

1. The disclosure of disbursements, debts and obligations. 

2. The disclosure of expenses allocated between federal and non-federd accounts. 

3. The disclosure of individual contributors* occupation and name of employer. 

4. The consistency between reported figures and bank records. 

5. The completeness of records. 

6. Other conunittee operations necessary to the review. 

Limitations 

In maintaining its disbursement records, NHRSC satisfied the minimum recordkeeping 

requirements of 11 CFR §102.9; however, the Audit staffs testing of disbursements was 

limited by the lack of extemd documentation, such as invoices. This lack of third party 

records limited testing of the nature of the expenditures and the adequacy of disclosure 

information, such as, payee address and purpose for disbursements. 
Part II 

Overview of Conunittee 

Committee Organization 

Important Dates 

• Date of Registration October 2,1980 

• Audit Coverage January 1,2007 - December 31,2008 

Headquarters Concord, New Hampshire 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Four Federal, Two Non-Federal 

Treasurer 

• Treasurer When Audit Was Conducted Robert Scott 

• Treasurer During Period Covered by Audit Robert Scott 

Management Information 

• Attended FEC Campaign Finance Seminar No 

• Who Handled Accounting and Recordkeeping 

Tasks 

Paid and Volunteer Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash on hand @ January 1,2007 $ 39,293 

o Contributions from Individuals 423,842 

o Contributions from Other Political Committees 295,028 

0 Transfers from Affiliated/Other Party 

Committees 

1,539,740 

0 Transfers from Non-federal Account 15,994 

o Offsets/Other Federal Receipts 5,907 

Total Receipts $ 2,280,511 

0 Other Federal Operating Expenditures 684,052 

o Refunds/Other Disbursements 5,481 

o Federal Election Activity 1.397.762 

0 Transfers to Affiliated/Other Party Committees 176,375 

Total Disbursements $ 2,263,670 

Cash on hand @ December 31,2008 $ 56,134 
Part III 

Smnmaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of NHRSC s reported figures to bank records 

revealed a misstatement of receipts, disbursements and ending cash-on-hand in 2007, and 

receipts and ending cash in 2008. For 2007, NHRSC understated receipts by $17,444, 

disbursements by $29,263 and overstated ending cash-on-hand by $9,929. In 2008, 

receipts were understated by $59,317 and ending cash-on-hand was understated by 

$26,142. The Audit staff recommends tiiat NHRSC amend its disclosure reports to 

correct these misstatements. 

(For more detail, see p. 4) 

Finding 2. Reporting of Dehts and Ohligations 

During audit fieldwork, tiie Audit staff noted tiiat NHRSC did not disclose debts 

outstanding as of January 1,2007, in the amount of $375,082 for legal services. The 

Audit staff recommends NHRSC amend its reports to disclose these debts. 

(For more detail, see p. 6) 
Part IV 

Findings and Recommendations 

Finding 1. Misstatement of Finamcial Activity 

Summary 

During audit fieldwork, a comparison of NHRSC*s reported figures to bank records 

revealed a misstatement of disbursements and ending cash-on-hand in 2007, and receipts 

and ending cash in 2008. For 2007, NHRSC understated receipts by $17,444, 

disbursements by $29,263 and overstated ending cash-on-hand by $9,929. In 2008, 

receipts were understated by $59,317 and ending cash-on-hand was understated by 

$26,142. The Audit staff recommends that NHRSC amend its disclosure reports to 

correct these misstatements. 

Legal Standard 

Contents of Reports. Each report must disclose: 

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

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

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

and 

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

Schedule B (Itemized Disbursements). 2 U.S.C. §434(b)(l), (2), (3), (4) and (5). 

Facts and Analsrsis 

A. Facts 

As part of this audit, the Audit staff reconciled reported activity to bank records for 

calendar years 2007 and 2008. The following charts outline the discrepancies for the 

beginning cash bdances, receipts, disbursements, and the ending cash bdances for each 

year. Succeeding paragraphs address tiie reasons for the misstatements, if known. 

2007 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2007 

$37,403 $39,293 $1,890 

Understated 

Receipts $298,127 $315,571 $17,444 

Understated 

Disbursements $299,428 $328,691 $29,263 

Understated 

Ending Cash Balance @ 

December 31,2007 

$36,102 $26,173 $9,929 

Overstated 
The begiiming cash-on-hand was understated by $1,890, and is unexplained, but is 

likely the result of prior period discrepancies. 

The net understatement of receipts was the result of the following: 

• Unreported transfers from non-federd account $ 17,100 

• Reported intra-account transfer as a transfer from a non-federd account (500) 

• Unexplained difference 844 

Net understatement of receipts $17.444 

The understatement of disbursements was the result of the following: 

• Unreported disbursements $15,950 

• Unreported transfers to non-federal accounts 12,375 

• Unexplained difference 938 

Understatement of disbursements $29.263 

The $9,929 overstatement of the ending cash-on-hand was the result of the 

misstatements described above. 

2008 Committee Activity 

Reported Bank Records Discrepancy 

Begiiming Cash Balance @ 

January 1,2008 

$36,102 $26,173 $9,929 

Overstated 

Receipts $1,905,623 $1,964,940 $59,317 

Understated 

Disbursements $1,911,733 $1,934,979 $23,246 

Understated 

Ending Cash Bdance @ 

December 31,2008 

$29,992 $56,134 $26,142 

Understated 

The net understatement of receipts resulted from the following: 

• Unreported transfers from Republican Nationd Committee (RNC) $30,100 

• Unreported interest from a certificate of deposit 672 

• Unreported receipt from non-federd account 3,394 

• Transfer from RNC reported incorrectiy 900 

• Unreported receipt from a political party committee 40,000 

• Reported receipts not supported by deposits (15,000) 

• Unexplained difference (749) 

Net understatement of receipts $59.317 

The understatement of disbursements in the amount of $23,246 resulted from 

disbursements that were not reported ($14,381), disbursements reported incorrectiy 

($2,010) and an unexplained under reporting of disbursements ($10,875). 

The $26,142 understatement of the ending cash-on-hand was the result of the 

misstatements described above. 
B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter during the exit conference and provided work 

papers detailing the adjustments. NHRSC representatives made no conunent on the 

issue. 

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

NHRSC: 

• Amend its reports to correct the misstatements for 2007 and 2008 as noted above; 

and, 

• Amend its most recently filed report to correct the cash-on-hand balance with an 

explanation that the change resulted from a prior period audit adjustment. Further, 

NHRSC should reconcile the cash balance of its most recent report to identify any 

subsequent discrepancies that may impact the $26,142 adjustment reconunended 

by the Audit staff. 

I Finding 2. Reporting of Dehts and Ohligations 

Simmiary 

During audit fieldwork, tiie Audit staff noted that NHRSC did not disclose debts 

outstanding as of January 1,2007, in the amount of $375,082 for legal services. The 

Audit staff recommends NHRSC amend its reports to disclose these debts. 

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 conmiittee reports it on the next regularly scheduled report. 

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

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

Facts and Analjrsis 

A. Facts 

During audit fieldwork, the Audit staff identified debt outstanding for legal services as of 

January 1,2007, totaling $375,082, not disclosed by NHRSC. During tiie audit period, 

NHRSC made payments, which reduced the outstanding balance to $305,082, as of 

December 31,2008. None of tiie reports filed during the audit period included the 

outstanding balance of this debt. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter during the exit conference and provided work 

papers detailing the debts. NHRSC representatives made no comment on the issue. 
The Audit staff recommends that, within 30 cdendar days of service of this report, 

NHRSC amend its reports to disclose this debt and corresponding debt payments on 

Schedules D.