FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 August 1,2013 

MEMORANDUM 

To: 

Through: 

From: 

By: 

Subject: 

The Conunission 

Alec Palmer 

Staff Director 

Patricia C. Orrock 

Chief Compliance Officer 

Thomas E. Hintermister— 

Assistant Staff Director 

Audit Division 

Alex Boniewicz^ll^S' 

Audit Manager -7 

Marty Favin 

Audit Manager 

Randy Harris 

Lead Auditor 

Audit Division Recommendation Memorandum on the Mississippi 

Democratic Party PAC (MDP) (Al 1-10) 

Pursuant to Commission Directive No. 70 (FEC Directive on Processing Audit Reports), 

the Audit staff presents its recommendations below and discusses the findings in the 

attached Draft Final Audit Report (DFAR). The Office of General Counsel (OGC) has 

reviewed this memorandum and concurs with the recommendations. 

Finding 1. Misstatement of Financial Activity 

In response to the Interim Audit Report, MDP filed amendments that materially 

complied with the recommendation. MDP had no additional comments in its 

response to the DFAR. 

The Audit staff recommends that the Commission find that MDP misstated their 

fmancial activity for calendar years 2009 and 2010. 
Finding 2. Disclosure of Disbursements 

In response to the Interim Audit Report, MDP filed amendments that materially 

complied with the recommendation. MDP had no additional comments in its 

response to the DFAR. 

The Audit staff recommends that the Commission find that MDP omitted 

disclosure infonnation related to disbursements totaling $361,109. 

Finding 3. Disclosure of Occupation/Name of Employer 

In response to the Interim Audit Report, MDP filed amendments that materially 

complied with the recommendation. MDP had no additional comments in its 

response to the DFAR. 

The Audit staff recommends that the Commission fmd that MDP failed to disclose 

occupation/name of employer for contributions from individuals totaling $17,426 

and did not demonstrate '*best efforts" to obtain, maintain, and submit disclosure 

information with respect to these contributions. 

Finding 4. Recordkeeping for Employees 

For the period covered by the audit, MDP did not maintain any monthly payroll 

logs, as required, to document the percentage of time each employee spent on 

federal election activity. For 2009 and 2010, the Audit staff identified payments to 

MDP employees totaling $138,741, for whom MDP was required to maintain 

monthly payroll logs. In response to the Interim Audit Report recommendation, 

MDP implemented a plan to track employees' time spent on federal election 

activities. MDP had no additional comments in its response to the DFAR. 

The Audit staff recommends that the Commission fmd that MDP failed to 

maintain logs to document the time employees spent on federal election activity 

totaling $138,741. 

MDP did not request an audit hearing. 

If this memorandum is approved, a Proposed Final Audit Report wjll be prepared within 

30 days of the Commission's vote. 

In case of an objection, Directive No. 70 states that the Audit Division Recommendation 

Memorandum will be placed on the next regularly scheduled open session agenda. 

Documents related to this audit report can be viewed in the Voting Ballot Matters folder. 

Should you have any questions, please contact Randy Harris or Marty Favin at 694-1200. 

Attachment: 

- Draft Final Audit Report of the Audit Division on the Mississippi Democratic 

Party PAC 

cc: Office of General Counsel 
Draft Final Audit Report of the 

Audit Division on the Mississippi 

Democratic Party 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 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 Yn^piti " 

the threshold '^J^ ,, 

requirements for 

substaniidl complianc^#%:,< 

with ihe .Aci.' '1 lie audit Wssdegfrinincs whether ihc 

coniniiiice complied wiih 

the liinit^pns, 

prohibit^is luid 

disclosure re^iements 

of the Act. 

About the Co 

The Mississippi Demo 

headquartered in Ja 

the chart on the co^ 

Financial Activity (p. 2) 

• Receipt .s 4., .^i^t^ 

ContributM^^&^flmdividuals 

"'^-f: ;Cpntributiorisl^i Other 

. / TPBillifial CommilJ^ 

(p. 2) 

*arty PAC is a state party committee 

||ssissippi. For more information, see 

llee^iianization, p. 2. 

ihl 

DisbWtimcnt 

• Operating Disbursements 

^Other Disbursements 

Disbursements 

Future ActioitliW 

The Conunission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

$ 153.038 

30,550 

568,534 

88,144 

951 

$ 841,217 

$ 437,223 

389,693 

$ 826,916 

Findings and Recommendations (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

• Disclosure of Disbursements (Finding 2) 

• Disclosure of Occupation/Name of Employer (Finding 3) 

• Recordkeeping for Employees (Finding 4) 

2 US.C. §438(b). 
Draft Final Report of the Audit 

Division on the Mississippi 

Democratic Party PAC 

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

Page 

Part I. Background 

Authority for Audit 

Scope of Audit 

Request for Early Commission Consideration of a Legal Question 

Part II. Overview of Conunittee 

Committee Organization 

Overview of Financial Activity 

Part III. Summaries 

Findings and Recommendations 

Part IV. Findings and Reconui^igdati 

Finding 1. Misstatement of Financial Activit^^ 

Finding 2. Disclosure of DiSprscmcnis " | 

Finding 3. Disclosure of Occupaiioii/Niimc of Employer 

Finding 4. Recordkeeping for l-linnluyccs 

S 

•"Si-

^'•.m\.: 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the Mississippi Democratic Party PAC (MDP), 

undertaken by the Audit Division of the Federal Election Commission (the Coimnission) 

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 ainy political committee that is 

required to file a report under 2 U.S.C. §434. Prior to condiioH; any audit under this 

subsection, the Commission must perform an intemal reyij^i^lfreports filed by selected 

committees to determine whether the reports filed by ^^^^^^^Mar conunittee meet the 

threshold requirements for substantial compliance wi't^^if^ i^^^U.S.C. §438(b). 

Scope of Audit •'W' 

Following Commission-approved procedures^.pe Audit staff evaluatedfi|arious risk 

factors and as a result, this audit examined: 

1. the receipt of contributions from prohibited sdiite^s; J^0.: '"'^p: 

the disclosure of individual confp|^|ors' occupa^^^^^^name of employe'f^ 

the consistency between report^j^^..and bank rt^ds; 

the disclosure of disbursements, c^kv^^|iligation^|^^, 

the completeness of records; and 'W'-'-- ''"•^^•i... H ' 

other committee opcraticMis necessarv to ihe re\ icw. ^ k 

Conunission^uidance . % ' ^ 

I 

Request fur Eurly Commission Consideration Legal Question 

Pursuant lo the "Policy Staicmciii lisiahlisl^^ l^pram for Requesting Consideration 

of Le^l Questions by the Coilmisbion," N^^^uested early consideration of a legal 

quest^i laised during the audit. M^^questioni^whether the monthly time logs 

required ».n^ 11 CFR §l^^[d)(l]f^^yied to employees paid with 100 percent federal 

funds (See^^ing 4.) ^if 

The Commission'l^luded, bgvote of 5-1, that 11 CFR §106.7(d)(l) does require 

committees to keep^^^|ith{^K for employees paid exclusively with federal fiinds. 

Exercising its prosecu^^^^Ketion, however, the Commission decided it will not 

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

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

such. The Audit staff informed MDP Counsel of the Commission's decision on MDP's 

request. This audit report does not include any finding or recommendation with respect 

to MDP's employees paid with 100 percent f^eral funds and reported as such. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

Date of Registration February 8,1982 

Audit Coverage January 1,2009 - December 31,2010 

Headquarters Jackson, Mississippi 

Bank Information 

Bank Depositories One 

• Bank Accounts Six feder9i;;itip. one non-federal 

Treasurer 

• Treasurer When Audit Was Conducted Mf Kjgn Harris 

Treasurer During Period Covered by Audit irey Scale 

Management Information 

• Attended the Commission Campaign 

Finance Seminar 

Who Handled Accounting and ^^^ci^ 

Recordkeeping Tasks 

PaidW ^ 

Overview of l^aif^al Ac^vity 

(Audited^mounts) 

Cash-on-hand @ Januarv 1,2009 $(10,177)' 

o Con^^^ions Iroi^^vidueil^^^ W 153,038 

o Coi^^pions from <^^^oli^^'> ^'^ W 30,550 

Com^^s ^ 

o Transferi^oiri Affiliated/»jr Part:f^|;-^, 568,534 

Committees . 

o Transfers froml^-federal i^ppunt 88,144 

o Other Receipts 951 

Total Receipts i^^^' ' $841,217 

o Disbursements 

o Operating Disbursements 437,223 

o Other Disbursements 389.693 

Total Disbursements $826,916 

Cash-on-hand @ December 31,2010 $ 4,124 

^ MDP's bank statement did not show a negative cash-on-hand balance at January 1,2009, due to an 

outstanding check that had not cleared its federal bank account. 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of MDP's reported financial activity with its bank 

records revealed a misstatement of receipts and disbursements in calendar year 2009. In 

response to the Interim Audit Report recommendation, MDP filed amended reports that 

materially corrected the misstatements. 

In addition, MDP filed original reports for 2010 that were m^^i^ty understated. 

Specifically, MDP's original reports understated receipts h^^^^^S in 2010. MDP did 

amend its reports prior to the notification of this audit tc^'icb^^t the^'^s^tated receipts 

activity for 2010. In response to the Interim Audit ]^^p*recommend5f^~ ^'^'^ — 

that it has made improvements to its reporting an^^^nting system to' 

accurate reporting. (For more detail, see p. 4.) ' 

MDP noted 

»ure more 

Finding :s 2. Disclosure of Disbursemei 

The Audit staff reviewed disbursements^ilcini/.C(l on the disclosure reports and identified 

disbursements totaling $361,109 with missing pavcc addresses. Inresponse to the 

Interim Audit Report recommendation, MDP mcUcria{^£orrect^ii< reports by filing 

amended reports to disclose ihe ini^siiig payee iiil'orm^Jii. (I 'or morc^tail, see p. 6.) 

Findings. Dis 

A review of all contributii 

contributions totaling $17,421 

Furthermore,J.5 

sufficiently doi 

In response lo 

materially com 

information. MD 

and implemented 

e of Occup^ion/Name of Employer 

pm individuals requiriiii: itemization indicated that 73 

e of oc^ation and/or name of employer. 

maitHEiS^d sui^ll information had not been 

"ibutions.'^^^^i 

Interim Aui 

disclosure 

ort^oiiiiuendation, MDP amended its reports to 

e rnis^iiicpccupation and/or name of employer 

described the host efforts procedures that have been developed 

c audit. (For more detail, see p. 7.) 

Finding 4. Recordkeeping for Employees 

During audit fieldwork, the Audit staff determined that MDP did not maintain any 

monthly payroll logs, as required, to document the percentage of time each employee 

spent on federal election activity. For 2009 and 2010, the Audit staff identified payments 

to MDP employees totaling $138,741, for whom MDP was required to maintain monthly 

payroll logs. In response to the Interim Audit Report recommendation, MDP 

implemented a plan to track employees' time spent on federal election activities. (For 

more detail, see p. 9.) 
Part IV 

Findings and Recommendations 

I Finding I. Misstatement of Financial Activity J 

Summary 

During audit fieldwork, a comparison of MDP's reported financial activity with its bank 

records revealed a misstatement of receipts and disbursements for calendar year 2009. In 

response to the Interim Audit Report recommendation, MDP filed amended reports that 

materially corrected the misstatements. 

In addition, MDP filed original reports for 2010 that were materially-understated. 

Specifically. MDP's original reports understated receipts by,|^|^§46 in 2010. MDP did 

amend its reports prior to the notification of this audit to c^f^t il^:l^|sstated receipts 

activity for 2010. In response to the Interim Audit Repo^ fecommeM^tipn, MDP noted 

that it has made improvements to its reporting and aee<i^iinting system tic^^^^ure more 

accurate reporting. 

the 

close: 

ginning and ei^ 

Importiii^ period ani 

e reporting peno 

e reporting period; 

|he calendar year; 

nd for the calendar 

Iteimzed Receipts) or 

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

Legal Standard 

Contents of Reports. Each report mus 

• the amount of cash-on-hand at 

• the total amount of receipts for 

• the total amount of disbursements 

year; and 

• certain transactions thai require itemization on Sclic 

Schedule B (Iterhizcd Disbiirsem|nts). 2 U.S.C. §434(b 

Facts and Analysis 

A. Misstalomi'iit of r'inani-ial Acti\ilv - 2009 

1. Facts ^ 

The Audit siat^econciled M^' S rep^^yictivity with its bank records and 

identified a niKiiicinent of receipts and Sbursements for calendar year 2009. 

The following charfi^^ls the^discrepancies and succeeding paragraphs explain the 

reasons for the misstate 
The beginning cash balance, as of January 1,2009, was overstated by $34,750 because of 

prior-period discrepancies. 

2009 Activity 

Reported^. Bank Records Discrepancy 

Beginning Cash Balance 

©January 1,2009 

$24,573 ($10,177) $34,750 

Overstated 

Receipts $202,756 $210,042 $7,286 

Understated 

Disbursements $174,855 $199,388^ 

.v!\-":'. 

$24,533 

Understated 

Ending Cash Balance 

@ December 31,2009 

$46,366 $45,889 

|?v. Overstated 

The understatement of receipts was the result of th^^^wing: 

• Receipts not reported " 

• Transfer from the non-federal account not rep^ 

• Transfer from the non-federal account reported 

• Over-reported receipts 

• Unexplained difference 

Net Understatement of Receipts m. '^k •^••. 

The understatement of disbursements was the'l^ilt of ilie ioWow ir.i:: 

Disbursements not ^^rteil 

Disbursements rep^ed but not ^&orted by check or debit 

Unexplained difference '^i^ 

$ 7.286 

$ 25,780 

(1,135) 

$24.533 

The $45,8|^f erstatemei^j|^e eril|[^cash bali^^^as the result of the reporting 

discrepancii^^Qted above. ^ ' ^ 

2. Interim ill^Report& AiditDivis^hRecommendation 

The misstatem^^^financial activity was discussed at the exit conference and the 

Audit staff provici^rclcvant schedules detailing the transactions. An MDP 

representative acknowledged the discrepancies in the reports and indicated that 

corrective amendments l^ould be filed. 

The Audit staff recommended that MDP: 

• amend its reports to correct the misstatements for 2009; 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 

^ This column does not total because MDP amended Ending Cash Balance on its 2008 Year-end Report but 

did not carry forward this adjustment on subsequent reports. 
and reconcile the cash balance on its most recent report to identify any 

subsequent discrepancies that may impact the $45,889 adjustment 

recommended by the Audit staff. 

3. Committee Response to Interim Audit Report 

In its response. MDP noted that it amended the 2009 reports and made corresponding 

amendments to subsequent reports. The Audit staff notes that as a result of these 

amendments, MDP materially corrected the misstatements. 

B. Misstatement of Financial Activity - Increased Activity 

1. Facts 

The Audit staff compared the original reports filed with the ba|[i^;^ecords and 

discovered a $228,932 understatement of receipts from Jan^g^lf2009 through 

December 31,2010. This amount represents the differen^|||^een receipts as 

originally reported and the amount of receipts per the This figure also 

includes the $7,286 understatement of receipts froi^^ii'in Seo^^A (Misstatement 

of Financial Activity - 2009) noted above. The^^^^e in activity^sip 10 was 

largely due to MDP not reporting transfers frqi^^^national party coil^i.||ee on its 

original reports totaling $198,597. ''^fct. -vyM:.:-;. 

•Ai:.::\ 

on 

0 with MDP 

2- ^ : ^ 

The Audit staff discussed the misst^" 

representatives during the exit confer 

submit any additional information or 

matter. 

3. Committee Respond to In^tt|i Audit^epoi| 

In its response, MDI' linled that tli^pcreased disclc 

bookkeeping errors thai occuired during the 20U9^1endar year and that it has made 

improvemep^§£^|s reponing <ind accoiiHiing sys^i to ensure more accurate 

Interim Audit Report & Audit j^ivision Recoi 

for 2009 111 

Audit stafi^|<€;pmmended that MDP 

' "'"'^kred relevant to the 

relate to minor 

reportiiig n the luture. 

I Finding Disclosur^kof D^bursements 

Smnmary 

The Audit staff reviil^^isbursenicnts itemized on the disclosure reports and identified 

disbursements totaling^^009 with missing payee addresses. In response to the 

Interim Audit Report rec^^^^^Joii. MDP materially corrected its reports by filing 

amended reports to disclose ^^^^ing payee information. 

Legal Standard 

Reporting Operating Expenditures. When operating expenditures to the same person 

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

• amount; ^ 

• date when the expenditures were made; and 

• name and address of the payee and purpose. 11 CFR § 104.3(b)(3). 
Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed all disbursements and identified 172 

itemized transactions, totaling $361^109 that did not include die payees' addresses. 

This accounted for 54 percent of the total dollar value of itemized disbursements. The 

majority of these omitted addresses were for disbursements made in 2010. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with MDP representatives at the exit conference and 

subsequently provided them with a schedule of disbursements with missing payee 

addresses. At the exit conference, MDP representatives agreed to | ^ amended reports to 

disclose the missing addresses. The Audit staff recommended di|if MDP amend its 

reports to disclose these omissions. 

rtfy 

C. Committee Response to Interim Audit Report 

In its response, MDP noted that it has amended the 

information. The Audit staff notes that as a result! 

corrected its disclosure of payee information. 

|M to provide the.:^j|ssing payee 

'ese amendments. materially 

Finding 3. Disclosure of Qccupation/rjame of Employi 

Summary 

A review of all contributions from individuals rcquirinjz iifiniyaiion indicated that 73 

contributions totaling $17,426 lacked disclosure of occu;):ilion and/or n|pne of employer. 

Furthermore, "best efforts" io obtain 

sufficiently documented for ihese coi 

maintain and subniii inforniuiion had not been 

mtions. 

In response to the I|]iterim Audlmei 

materially cqipi^tj^e^^^psure'^^.^.. „ 

informatioi^iiSwP also^^ibed Sliest 

and implemi^ted since the awjti 

MDP amended its reports to 

I and/or name of employer 

iSies that have been developed 

Legal Standfi^ll 

A. Itemization re||^ ^ for contributions from Individuals. A political committee 

other than an auti^^pd cominiiiec must itemize any contribution from an individual 

if it exceeds $200 p^iileiidar year, either by itself or when combined with other 

contributions from the Name contributions. 2 U.S.C §434(b)(3)(a). 

B. Required Information for Contributions from Individuals. For each itemized 

contribution from an individual, the conunittee must provide the following 

information: 

• the contributor's full name and address (including zip code); 

• die contributors occupation and the name of his or her employer; 

• the date of receipt (the date the committee received the contribution); 
• the amount of the contribution; and 

• the calendar year-to-date total of all contributions from the same individual. 

11 CFR §§100.12 and 104.3(a)(4) and 2 U.S.C §434(b)(3)(A). 

C. Best Efforts Ensures Compliance. When the treasurer of a political coirunittee 

shows that the committee used best efforts (see below) to obtain, maintain, and 

submit the information required by the Act, the committee's reports and records will 

be considered in compliance with the Act. 2 U.S.C §432(h)(2)(i). 

D. Definition of Best Efforts. The treasurer and the committee will be considered to 

have used "best efforts" with respect to contributions if the committee satisfied all of 

the following criteria.. 

• All written solicitations for contributions included: 

o a clear request for the contributors full name, 

and name of employer; and ^» 

o the statement that such reporting is requiredb* teaei^^w. 

Within 30 days of receipt of the contributi^t^ie treasure^&de at least one 

effort ler a written r^^t or a to obtain the missing informatior^^^ 

documented oral request. '''v^.. 

The treasurer reported any contributor inl^imtion th^^lthough riM ^initially 

r|p^p address, occupation. 

provided by the contributor, was obtained ii^^^H 

was contained in the commi||^[^,records or i 

committee filed during the sa^^(p-yeur cycl 

^^communicatiteor 

• Imports that the 

FR §104.7(b) 

Facts and Analysis 

A. Facts 

A review of itemized cd^Kitions from individ 

totaling $17,426, or 52 pe^^^f tlic dollar value 

be itemized by MDP, lacked^^^sui\: oi'^^patioi 

audit fieldwq]^^;lH^i^^@vided n%c\'i(lcn^^^ in 

obtain, mai^ 

with missi^j 

blank on the 

infon^uitipnifs 

sed 

(licated thai 73 contributions 

^dividual contributions required to 

br name of employer. During 

t had utilized "best efforts" to 

st of the contributor entries 

formation we^#ithe] notation "Best Effort" or left 

dules A (Iterh^d RecMi^Jiled with the Commission. 

The Audit staff as^^MDP representatives to describe MDP's best efforts policy. MDP 

representatives respo^^that no policy was in effect during the period covered by the 

audit. The Audit staff pll|]^d with a list of contributors for whom occupation 

and/or name of employer ir^^^A)ii was missing. MDP retumed this list to the Audit 

staff with the missing informa^pTiUed in but noted that MDP had not contacted the 

contributors to obtain this information. The Committee explained that MDP 

representatives had obtained the information from personal knowledge of the individuals 

and research on the intemet after receiving the list from the Audit staff. 
B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the disclosure of occupation and name of employer with MDP 

representatives at the exit conference. MDP representatives reiterated diat they had 

provided the missing information to the Audit staff and that they have established a 

standard new policy to collect all the required contributor information at the time 

contributions are accepted. 

The Audit staff recommended that MDP provide documentation that it exercised best 

efforts during die audit period to obtain, maintain and submit the required contributor 

information. In addition, MDP should file amended Schedules A to disclose the 

contributor information obtained subsequent to audit fieldwork. 

C. Committee Response to Interim Audit Report 4^^-

In its response, MDP filed Schedules A that provided the missi|^^^upation and name 

of employer information. Further, MDP explained that it ha^^||^^.nable to locate 

records that indicate it had made follow-up requests for doj^pnfj^mtion during the 

2010 cycle, but noted that its solicitation materials re^jMylncludel^^^etciuest for 

occupation and employer information. The Audit §li^|idtes that as a riSilt..of these 

amended reports, MDP materially corrected the difipfure of its contribut^^v^ccupation 

and name of employer. "^^^ -

i. 

'%*durcs such that all ^ 

iibrination. In addition, the 

MDP also pointed out that it has developed be.st efforts proc 

solicitations include requests for occupalion and employer 

procedures include follow-up requests for donorsj missing inlormation within 30 days of 

receipt of a contribution. Furthermore, don^^missiiig >.uch inforni^pn at the time a 

report is required to be filed an intemal review 10 ensure thaiSlDP has not 

inadvertently omitted inf^^^^^Mained wiiliin connir.ilec lecords at the time of 

filing. Any information^^^ved su^ec|Ment to ;i filed n-['ort will bci^ncluded on 

amended reports. 

I Finding jgkeeriiig for jmplcj 

Summi ^ 

During audit1^||^ork, the Au^|:^|aff di^i^^ed that MDP did not maintain any 

monthly payroiri^^s, as required,*pjdocumi^the percentage of time each employee 

spent on federal elecli^activity. ^^2009 and 2010, the Audit staff identified payments 

to MDP employees to^^^ $138,7^^or whom MDP was required to maintain mondily 

payroll logs. In respons^'^^e Init|f^ Audit Report recommendation, MDP 

implemented a plan to es' time spent on federal election activities. 

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 as follows: 
10 

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

month on federal election activities must be paid eidier 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 mondi on 

federal election activities may be paid entirely with funds that comply with state 

law. 11 CFR§106.7(d)(l). 

Pacts and Analsrsis 

A. Facts 

During fieldwork, the Audit staff reviewed disbursements for j^pl^ - MDP did not 

maintain any monthly logs or equivalent records to documei|^^^^^^centage of time each 

employee spent in cormection with federal election activit^^||&he^^|gs are required to 

document the proper allocation of federal and non-fedf^^mnds used^^ay employee 

ayroU.'* 

f federal 

iih 

salaries and wages. For 2009 and 2010, logs were 

This amount represents the total payroll for empl 

and non-federal funds during the audit period. M 

exclusively non-federal funds. 

for $138,7 

paid with an 

d no employees 

B. Interim Audit Report & Audit Di^^i i Kecommendaiion 

After the exit conference, the Audit staff c&usscd the payroll icci 

MDP representatives. An MDP representaK: s jspondcd thai MC 

payroll logs or other payroll dp^pentation. 

Absent provision of any-^'^Sithly lo^lhe Audit^iuCI' re^miiieiid 

rdkeeping issue with 

fluid not located any 

C. Com 

In its respi 

spent on fecfi 

Section activf 

at, MDP provide 

and implement a plan to mffitain sucll^onthly payroll logs to traci the percentage of 

time each employee spends 6n|||dera] 

:esp(awgi^|Jntenfe-;^udit ""^ _ 

MDP noteGfi|k|J[t no>)^^|intains mMftly logs to track employee time 

election activRilk " • 

Payroll is stated net of taxes and benefits.