Interim Audit Report of the 

Audit Division on the Utah State 

Democratic Committee 

(Januaiy 1, 2011 - December 31, 2012) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political conunittM 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 Utah State Democratic Committee is a state party committee 

headquartered in Salt Lake City, Utah. For more information, see 

the chart on the Committee Organization, p. 3. 

Financial Activity (p. 4) 

• Receipts 

o Contributions from Individuals 

o Contributions from Other Political 

Committees (PACs) 

o Transfers from Affiliated/Other Party 

Committees 

o Transfers from Nonfederal Accounts 

o Other Receipts 

Total Receipts 

• Disbursements 

o Operating Expenditures 

o Federal Election Activity 

o Coordinated Party Expenditures 

o Other Disbursements 

o Transfers to Affiliated/Other Party 

Committees 

Total Disbursements 

• Levin Receipts 

• Levin Disbursements 

$448,066 

206,626 

771,602 

550,073 

119,872 

S 2,096,239 

$1,119,344 

709,716 

134,156 

67,902 

65,000 

$ 2,096,118 

$104,500 

$103,500 

Findings and Recommendations (p. 5) 

• Misstatement of Financial Activity (Finding 1) 

• Recordkeeping for Employees (Finding 2) 

• Improper Bank Account Structure (Finding 3) 

• Receipt of Levin Fund Donations that Exceed the Limit (Finding 4) 

• Receipt of Contributions that Exceed Limits (Finding 5) 

' On September 1,2014, the Federal Election Campaign Act of 1971, as amended ("the Act"), was 

transfbrred from Title 2 of the United States Code to new Title 52 of the United States Code. 

^ 52 U.S.C. §30111(b). 
Interim Audit Report of the 

Audit Division on the Utah 

State Democratic Committee 

(January 1, 2011 - December 31, 2012) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Commission Guidance 1 

Part II. Overview of Committee 

Committee Organization 3 

Overview of Financial Activity 4 

Part III. Summaries 

Findings and Recommendations S 

Part IV. Findings and Recommendations 

Finding 1. Misstatementof Financial Activity 7 

Finding 2. Recordkeeping for Employees 9 

Findings. Improper Bank Account Structure 10 

Finding 4. Receipt of Levin Fund Donations that Exceed the Limit 12 

Finding S. Receipt of Contributions that Exceed Limits 14 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Utah State Democratic Committee (USDC), 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 52 U.S.C. §30111(b), which permits the Commission to conduct audits and 

field investigations of any political committee that is required to file a report under 52 U.S.C. 

§30104. 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. 

52 U.S.C. §30111(b). 

Scope of Audit 

Following Commission-approved procedures, the Audit staff evaluated various risk factors and 

as a result, this audit examined: 

1. the receipt of excessive contributions; 

2. the receipt of contributions from prohibited sources; 

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

4. the disclosure of disbursements, debts and obligations; 

5. the disclosure of expenses allocated between federal and non-federal accounts; 

6. the consistency between reported figures and bank records; 

7. the completeness of records; 

8. the disclosure of independent expenditures; and 

9. 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 Prograrh for Requesting 

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

unaffiliated with USDC requested early consideration of a legal question raised during audits 

covering the 2010 election cycle. 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)(l) does require committees 

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

prosecutorial discretion, however, the Commission decided it would 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. The Audit staff informed 

USDC 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. This audit report does not include any findings or 

recommendations with respect to USDC employees paid with 100 percent federal funds and 

reported as such. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration November 16,1978 

• Audit Coverage January 1,2011 - December 31,2012 

Headquarters Salt Lake City, Utah 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Six federal and four non-federal 

Treasurer 

• Treasurer When Audit Was Conducted Brian King: 9/20/13-3/16/15 

Peter Corroon: 3/17/15 - Present 

• Treasurer During Period Covered by Audit Kathleen Snyder: 1/01/11 - 10/10/11; 

Robert Miller: 10/11/11 - 12/31/12 

Management Information 

• Attended Commission Campaign Finance Seminar Yes 

• Who Handled Accounting and Recordkeeping 

Tasks 

Paid Staff 
Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand ® January 1,2011 S 82,729 

Receipts 

o Contributions from Individuals 448,066 

o Contributions from Other Political Committees 

(PACs) 206,626 

o Transfers from Affiliated/Other Party Committees 771,602 

o Transfers from Nonfederal Accounts 550,073 

o Other Receipts 119,872 

Total Receipts 2,096,239 

Disbursements 

o Operating Expenditures 1,119,344 

o Federal Election Activity 709,716 

o Coordinated Party Expenditures 134,156 

o Other Disbursements 67,902 

o Transfers to Affiliated/Other Party Committees 65,000 

Total Dishursements 2,096,118 

Cash-on-hand ® Decemher 31,2012 S 82,850 

Levin Cash-on-hand ® May 8,2012 SO 

Total Levin Receipts 104,500 

Total Levin Dishursements 103,500 

Levin Cash-on-hand @ December 31,2012 SI,000 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

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

records found that, for 2011, USDC understated its ^ginning cash by $17,885 and 

overstated its receipts and ending cash by $92,203 and $74,545, respectively. For 2012, 

only the beginning and ending cash were misstated. Beginning cash was overstated by 

$74,545 and ending cash was overstated by $75,866. Subsequent to audit notification, 

USDC amended its reports, which materially corrected the begirming cash for 2011. The 

Audit staff recommends that USDC file amended disclosure reports to correct the 

remaining misstatements. (For more detail, see p. 7.) 

Finding 2. Recordkeeping for Employees 

During audit fieldwork, the Audit staff found that USDC did not maintain monthly 

payroll logs for some of its payroll, as required, to document the percentage of time each 

employee spent in connection with a federal election. For 2011 and 2012, the Audit staff 

identified 42 payroll transactions totaling $62,135, for which monthly payroll logs were 

missing or incomplete. This consisted entirely of payroll which was allocated between 

federal and non-federal funds. Absent the provision of monthly time logs that have not 

been made available to date, the Audit staff recommends that in the future USDC 

maintain monthly payroll logs for all of its employees. (For more detail, see p. 9.) 

Finding 3. Improper Bank Account Structure 

USDC maintained a bank account in which all funds, including both federal and nonfederal, were temporarily transferred from lower accounts (federal and non-federal) to a 

parent account that served as a temporary holding account for all USDC funds. This 

account structure was maintained for ten months in 2011. The Audit staff was 

subsequently informed that it may have violated 11 CFR 102.5(a)(l)(i), which provides 

for the permissible account structure pertaining to federal and non-federal activity. The 

Audit staff recommends that USDC provide any additional information or written 

comments that it considers relevant to this matter. (For more detail, see p. 10.) 

Finding 4. Receipt of Levin Fund Donations that Ehtceed the 

Limit 

The Audit staff identified two donations to the Levin Fund that exceeded the donation 

limitation by $12,000. The Audit staff recommends that USDC show that these 

donations were not excessive or provide an accounting to demonstrate the sufficiency of 

Levin Funds and Levin eligibility for the proposed substitute Levin donors at the time of 

the excessive Levin expenditures. Absent such action, USDC should refund the $12,000 

in excessive donations and provide evidence of such refunds. (For more detail, see p. 

12.) 
Finding 5. Receipt of Contributions that Exceed Limits 

USDC accepted contributions from two political action committees that exceeded the 

limitation by S8,S00. Both of the excessive contributions were refunded; however, the 

refunds were not made timely. The Audit staff recommends that USDC submit any written 

comments it considers relevant. (For more detail, see p. 14) 
Part IV 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

Summary 

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

records found that, for 2011, USDC understated its beginning cash by $17,885 and 

overstated its receipts and ending cash by $92,203 and $74,545, respectively. For 2012, 

only the beginning and ending cash were misstated. Beginning cash was overstated by 

$74,545 and ending cash was overstated by $75,866. Subsequent to audit notification, . 

USDC amended its reports, which materially corrected the beginning cash for 2011. The 

Audit staff recommends that USDC file amended disclosure reports to correct the 

remaining 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 the reporting period and for the calendar year; 

and 

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

Schedule B (Itemized Disbursements). 52 U.S.C. §30104(b)(l), (2), (3), (4) and (5). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reconciled USDC's reported financial activity 

with its bank records for the calendar years 2011 and 2012 and identified misstatements 

for 2011 in its opening cash balance, receipts and ending cash balance. The following 

chart outlines the discrepancies between USDC's disclosure reports and its bank records, 

and the succeeding paragraphs explain, to the extent possible, Ae reasons for the 

misstatements. 
2011 Committee Activity 

Reported Bank Records Discrepancy 

Opening Cash Balance @ 

January 1,2011 $64,844 $82,729^ $17,885 

Understated 

Receipts $477,497 $385,294 $92,203 

Overstated 

Disbursements $458,632 $458,859 $227 

Understated 

Ending Cash Balance 

@ December 31,2011 $83,709 $9,164 $74,545 

Overstated 

The overstatement of receipts resulted from the following: 

• Transfers from non-federal accounts over reported 

• Fidelity investment account receipts over reported 

• Unexplained difference 

Net Overstatement of Receipts 

$ (90,439) 

(2.170) 

406 

The misstatement of the opening cash balance in 2011 resulted primarily from USDC not 

reporting the proper beginning balance and activity for the Karen Shepherd Fund.^ 

Subsequent to audit notification, USDC amended its reports to adjust the opening cash 

balance for this fund, which materially corrected the opening cash balance for 2011. The 

misstatement of the ending cash balance in 2011 resulted primarily from the opening 

cash adjustment for the Karen Shepherd Fund and the net overstatement of receipts 

detailed above. 

For 2012, USDC overstated its opening cash balance by $74,545 and overstated its 

ending cash balance by $75,866. The overstatements resulted primarily from the 

discrepancies noted above during calendar year 2011. USDC has not filed amendments 

to correct the misstated cash balances for 2012. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff explained the misstatements above, and other 

possible misstatements related to a bank account in which all funds, including both 

federal and non-federal funds, were temporarily transferred from lower accounts (federal 

and non-federal) to a parent account that served as a temporary holding account for all 

USDC funds. Schedules of the misstatements were provided to USDC representatives 

The opening cash balance was adjusted to include a federal cash balance from USDC's parent account 

discussed in Finding 3. 

The Karen Shepherd Fund consisted of amounts originally donated from the Karen Shepherd for 

Congress Committee in I99S. During 2011, total receipts were SI, 100 and there were no disbursements. 

The opening cash balance at the beginning of 2011 was SSS,620 and the closing balance at the end of 

2011 was S56,720. These balances were included in the amendments filed by USDC after notification of 

the audit. It is also noted that that USDC closed the account for the Karen Shepherd Fund in March 2014. 
and Counsel. Counsel stated that they would review the schedules and might seek 

Commission consideration regarding the inclusion of the parent account as a federal 

account. Subsequently, USDC filed a Request for Commission Consideration of a Legal 

Question; however, the matter was withdrawn after the Audit staff, in further consultation 

with the Office of General Counsel, decided not to include activity from the parent 

account as part of the misshitement finding since USDC did not use the parent account to 

pay any of its expenses and it was not used as a Federal allocation account.^ 

The Audit staff recommends that, within 30 calendar days, USDC file amended 

disclosure reports to correct the remaining misstatements for the overstatement of ending 

cash and receipts in 2011 and the misstated cash balances in 2012. 

Finding 2. Recordkeeping for Employees 

Suznmaxy 

During audit fleldwork, the Audit staff found that USDC did not maintain monthly 

payroll logs for some of its payroll, as required, to document the percentage of time each 

employee spent in connection with a federal election. For 2011 and 2012, the Audit staff 

identified 42 payroll transactions totaling $62,135, for which monthly payroll logs were 

missing or incomplete. This consisted entirely of payroll which was allocated between 

federal and non-federal funds. Absent the provision of monthly time logs that have not 

been made available to date, the Audit staff recommends that in the future USDC 

maintain monthly payroll logs for all of its employees. 

Legal Standard 

Maintenance of Monthly Logs. 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 have their pay 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)(l). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbursements for payroll. USDC was 

required to maintain monthly logs or equivalent records to document the percentage of 

time each employee spent in connection with a federal election for $358,530 in payroll. 

These logs are required to document the proper allocation of federal and non-federal 

' The parent account is the subject of Finding 3- Improper Bank Account Structure. 
10 

funds used to pay employee salaries and wages. For some employee time records, USDC 

properly utilized a payroll log to record the time spent on federal election activity. 

However, some payroll logs were either missing or were not complete for payroll totaling 

$62,135. The tot£d of $62,135 consisted entirely of payroll reported on Schedules H4 

and paid with an allocation of federal and non-feideral fUnds. 

B. Interim Atidit Report & Audit Division Recommendation 

At the exit conference and during audit fieldwork, the Audit staff discussed the payroll 

recordkeeping issue with USDC representatives. The representatives noted that most of 

the missing records were for three individuals, one of whom is now deceased. The 

representatives stated that, starting in 2012, USDC adopted new employee policies and 

procedures that required all employees to sign timesheets that tracked the percentage of 

time spent on federal election activity. A sample of the new timesheet and a copy of the 

policies and procedures were provided to the Audit staff. The Audit staff found the 

planned changes sufficient for tracking the amount of time spent by USDC employees on 

federal election activity. 

For USDC employees that were paid with an allocation of federal and non-federal funds 

for which payroll logs were missing or incomplete, the Audit staff recommends that, 

within 30 calendar days of service of this report, USDC: 

• provide evidence that the missing or incomplete monthly time logs were 

maintained to document the percentage of time an employee spent in connection 

with a federal election; and 

• continue to maintain payroll logs according to the policy provided to the Audit 

staff. 

Finding 3. Improper Bank Account Structure 

Summary 

USDC maintained a bank account in which all funds, including both federal and nonfederal, were temporarily transferred from lower accounts (federal and non-federal) to a 

parent account that served as a temporary holding account for all USDC funds. This 

account structure was maintained for ten months in 2011. The Audit staff determined the 

account was not a federal account in accordance with 11 CFR 102.5(a)(l)(i), which 

provides for the permissible account structure pertaining to federal and non-federal 

activity. Upon review of the account activity, the Audit staff concluded that USDC did 

not improperly use non-federal funds to pay for federal activity. The Audit staff 

recommends &at USDC provide any additional information or written comments that it 

considers relevant to this matter. 

Legal Standard 

A. Accounts for Federal and Non-Federal Activity. A party committee that finances 

political activity in connection with both federal and non-federal elections may establish 

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

such (see Part 1, Background, Commission Guidance, Request fbr Early Commission Consideration of a 

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

two accounts (federal and non-federal) and allocate shared expenses - expenses that 

simultaneously support federal and non-federal election activity - between the two 

accounts. Alternatively, the committee may conduct both federal and non-federal activity 

from one bank account, which is considered a federal account. 11 CFR §102.S(a)(l)(i). 

B. Federal v. Non-Federal Account. The federal account may contain only those funds 

that are permissible under the federal election law. The non-federal account may contain 

fimds that are not permitted under the federal law (but are legal under state law), such as 

contributions that exceed the limits of the federal law and contributions from otherwise 

prohibited sources, such as corporations and labor organizations. 11 CFR §102.S(a)(l)(i) 

and (a)(3). 

C. Transfers. Generally, a political committee may not transfer funds from its nonfederal account to its federal account, except when the committee follows specific rules 

for paying for shared federal/non-federal election activity. 11 CFR §§102.S(a)(l)(i) and 

106.5(g). 

D. Paying for Allocable Expenses. The Commission regulations offer party committees 

two ways to pay for allocable, shared federal/non-federal expenses. 

• They may pay the entire amount of the shared expense from the federal account 

and transfer ^ds from the non-federal account to the federal account to cover the 

non-federal share of that expense; or 

• They may establish a separate allocation account into which the committee 

deposits funds from both its federal and non-federal accounts solely for the 

purpose of paying the allocable expenses of shared federal/non-federal activities. 

11 CFR §106.5(g)(l)(i) and (ii)(A). 

E. Reporting Allocable Expenses. A political committee that allocates federal/nonfederal expenses must report each disbursement it makes from its federal account (or 

separate allocation account) to pay for a shared federal/non-federal expense. Committees 

report these kinds of disbursements on Schedule H-4. 11 CFR § 104.17(b). 

Facts and Analysis 

A. Facts 

Prior to audit fieldwork, USDC informed the Audit staff that a previous Executive 

Director had maintained a bank account that included both federal and non-federal funds, 

obtained primarily through automatic transfers (sweeps) from linked sub accounts (a 

federal bank account and a non-federal bank account). The parent account also 

automatically transferred money back to the sub accounts to pay for checks and other 

debits from Ae sub accounts. The effects of these transfers, on a daily basis, were to 

maintain zero balances in these sub accoimts." 

^ The parent account also received credit card contributions from both federal and non-federal 

donors, and was used to pay expenses relating to the processing fees for those credit card 

contributions. 

' Other than the linked federal sub-account, USDC did not maintain a federal account for its daily 

operational activities. 
12 

USDC did not deposit funds directly into the parent account, other than small credit card 

contributions, totting S41,784, and the aforementioned automatic transfers. The account 

was not used to pay bills, except for credit card fees associated with contributions that 

totaled $2,435. All transfers for allocated costs were paid directly by check or intemet 

transfer from a non-federal account to a federal account. The automatic sweeps function 

was discontinued in October of 2011 ? Thereafter, the parent account served only as a 

credit card processing account. 

Under 11 CFR §102.5, committees must use a federal account to deposit and pay all 

federal activity. Alternatively, a committee may choose to establish a special account, 

called an allocation account, solely for the purpose of paying mixed federal/non federal 

expenses. Funds are then transferred from the federal and nonfederal accouiits into the 

allocation account to pay for allocable activity. USDC's account structure as described 

above does not comply with the regulations at 11 CFR § 102.5. 

The commingling of federal and non-federal funds into the parent account increased the 

risk of utilizing non-federal funds for federal activity. However, based on a funding 

analysis of all USDC's accounts, the Audit staff concluded that no overfimding of federal 

activity from non-federal accounts existed during the audit period. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed the improper account structure with 

USDC representatives and Counsel and it was subsequently presented as a finding. 

Counsel stated that USDC agreed that the account structure was improper and that its use 

had been discontinued. Subsequent to the exit conference. Counsel provided sufficient 

explanation to assure the Audit staff, in conjunction with its own andysis, that no 

overiunding of federal activity from all USDC accounts for the audit period resulted from 

the commingling of federal and non-federal funds in the parent account. 

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

provide any additional information or written comments that it considers relevant to this 

finding. 

Finding 4. Receipt of Levin Fund Donations that Exceed 

the Limit 

Summary 

The Audit staff identified two donations to the Levin Fund that exceeded the donation 

limitation by $ 12,000. The Audit staff recommends that USDC show that these 

donations were not excessive or provide an accoimting to demonstrate the sufficiency of •!, 

Levin Funds and Levin eligibility for the proposed substitute Levin donors at the time of i 

the excessive Levin expenditures. Absent such action, USDC should refund the $12,000 

in excessive donations and provide evidence of such refunds. 

' Of the contributions and fees mentioned in this paragraph, only S7,S17 was processed and deposited after 

October 2011; the fees totaled S16S. 
13 

Legal Standard 

Party Committee Limits. A state, district or local committee of a political party must 

not solicit or accept from any person (including any entity established, financed, 

maintained, or controlled by such person) one or more donations of Levin funds 

aggregating more than $10,000 in a calendar year. If the state limit is less than $10,000, 

the committee must adhere to that limit. 11 CFR §300.3 l(d)(l)-(2). 

Levin Funds Accounts and Accounting. For Levin fund expenditures. Committees 

must either: 

• Establish a separate Levin account (in addition to the non-federal and federal 

accounts); or 

• Deposit Levin funds into the non-federal account, and demonstrate through a 

reasonable accounting method that it has sufficient Levin funds in the account to 

cover any expenses allocated to Levin funds.'" 11 CFR §§ 102.S(a)(3) and 

300.30(c). 

Facts and Analysis 

A. Facts 

USDC deposited its Levin funds into its non-federal account, and reportedly "flagged" 

(tracked) its donations. It later transferred these Levin donations, as needed, into its 

Levin account. During the audit period, USDC made two lump-sum transfers fix>m its 

non-federal account into its Levin account, in anticipation of making Levin 

disbursements. The Audit staff reviewed these donations and identified two donations in 

2012 that exceeded the Levin donation limit. 

USDC exceeded the Levin donation limit by $12,000. Utah state law does not address 

limits for Levin fund donations; therefore, Ae federal limit of $10,000 per donor in a 

calendar year should have been followed. One donor made donations totaling $18,000, 

and exceeded the donation limit by $8,000 and the other donor made donations totaling 

$14,000, and exceeded the donation limit by $4,000. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed this matter with USDC representatives 

who replied, that Levin funds were transferred from USDC's non-federal account to its 

Levin account, and that because of a clerical error the wrong Levin donors were 

disclosed. USDC proposed amending its report to disclose different Levin eligible 

donors. 

The Audit staff agrees that the amendments would resolve the issue of excessive Levin 

donations, but seeks more information about the accounting method utilized and the 

related clerical disclosure errors. 

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

provide evidence these donations were not excessive or show through a reasonable 

Levin fiinds cannot be deposited into a federal account. 
14 

accounting method that total Levin funds were sufficient and that the proposed substitute 

Levin donors were Levin eligible at the time excessive Levin expenditures were made. 

Absent such action, USDC should refund the $12,000 in excessive donations and provide 

evidence of such refunds (to include copies of the front and back of the cancelled 

checks). 

Finding 5. Receipt of Contributions that Exceed Limits 

Summary 

USDC accepted contributions from two political action committees that exceeded the 

limitation by $8,500. Both of the excessive contributions were refunded; however, the 

refunds were not made timely. The Audit staff recommends that USDC submit any 

written comments it considers relevant. 

Legal Standard 

A. Party Committee Limits. A state, district or local committee of a political party may 

not receive more than a total of $5,000 per calendar year from a multicandidate 

political committee. 52 U.S.C. §30116(a)(2)(C) and 11 CFR §110.2(d). 

B. Handling Contributions That Appear Excessive. If a committee receives a 

contribution that appears to be excessive, the committee must either: 

• Return the questionable check to the donor; or 

• Deposit the check into its federal account and: 

o Keep enough money in the account to cover all potential refunds; 

o Keep a written record explaining why the contribution may be illegal; 

o Include this explanation on Schedule A if the contribution has to be 

itemized before its legality is established; 

o Seek a reattribution or redesignation of the excessive portion, following 

the instructions provided in the Commission regulations; and 

o If the committee does not receive a proper reattribution or redesignation 

within 60 days after receiving the excessive contribution, refund the 

excessive portion to the donor. 11 CFR § 103.3(b)(3), (4) and (5). 

Facts and Analysis 

4 

A. Facts 

USDC accepted contributions from two multicandidate political action committees that 

exceeded the limitation by $8,500. One of the contributions was made in 2011 for 

$10,000 and the other was made in 2012 for $8,500, resulting in excessive contributions 

of $5,000 and $3,500, respectively. Both of the excessive contributions were refunded; 

however, the refunds were not made timely (refunds were made 129 days and 373 days 

later). 

B. Interim Audit Report & Audit Division Recommendation 

Subsequent to the exit conference, the Audit staff presented this matter to USDC 

representatives. USDC acknowledged the errors and noted that they had addressed them. 
15 

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

submit any written comments it considers relevant.