Interim Report of the 

Audit Division on the 

National Right to Life Political 

Action 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 

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 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. 2) 

The National Right to Life Political Action Committee is a separate 

segregated fund of the National Right to Life Committee and is 

headquartered in Washington, DC. For more information, see the 

chart on the Committee Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o From Individuals $ 3,662,627 

o From Other Political Committees 9,850 

o Offsets to Operating Expenditures 4,051 

Total Receipts $ 3,676,528 

• Disbursements 

o Operating Expenditures 

o Independent Expenditures 

o Contributions to Other Committees 

Total Disbursements 

$ 566,590 

2,804,925 

13,750 

$3,385,265 

Findings and Recommendations (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

• Disclosure of Occupation and Name of Employer (Finding 2) 

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

Audit Division on the 

National Right to Life Political 

Action 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. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding 1. Misstatementof Financial Activity 4 

Finding 2. Disclosure of Occupation and Name of Employer 7 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the National Right to Life Political Action Committee 

(NRL PAC), 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 2 U.S.C. 

§438(b), which permits the Commission to conduct audits and field investigations of any 

political committee 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 intemal 

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. 2U.S.C. §438(b). 

Scope of Audit 

Following Conmiission 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 individual contributors* occupation and name of employer. 

3. The consistency between reported figures and bank records. 

4. The completeness of records. 

5. Other committee operations necessary to the review. 

Limitations 

In maintaining its disbursement records, NRL PAC satisfied the minimum recordkeeping 

requirements of 11 CFR §102.9. However, the lack of external documentation, such as 

invoices and broadcast station affidavits, limited the Audit stafTs testing of the proper 

reporting of debts and obligations, as well as the adequacy of disclosure of independent 

expenditures. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration July 12,1979 

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

Headquarters Washington, DC 

Bank Information 

• Bank Depositories One 

• Bank Accounts Two 

Treasurer 

• Treasurer When Audit Was Conducted Carol Tobias 

• Treasurer During Period Covered by Audit Amarie Natividad 

(January 1,2007 - September 3,2008) 

Carol Tobias 

(September 4,2008 - Present) 

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 1,2007 $ 481,806 

Receipts 

o From Individuals $ 3,662,627 

o From Other Political Committees 9,850 

o Offsets to Operating Expenditures 4,051 

Total Receipts $ 3,676,528 

Disbursements 

o Operating Expenditures $ 567,681 

o Independent Expenditures 2.804.925 

o Contributions to Other Committees 13,750 

Total Disbursements $ 3,386,356 

Cash on hand @ December 31,2008 $ 773,069 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

A comparison of NRL PACs reported figures with bank records revealed a misstatement of 

receipts and cash-on-hand in 2007 and disbursements and cash-on-hand in 2008. For 2007, NRL 

PAC overstated beginning cash-on-hand by $139,547, understated receipts by $38,239, and 

overstated ending cash-on-hand by $104,632. In 2008, NRL PAC overstated disbursements by 

$1,437,635 and understated the ending cash-on-hand by $1,300,378. The Audit staff 

recommends that NRL PAC amend its disclosure reports to correct the misstatements for both 

2007 and 2008. 

In addition, the original reports filed by NRL PAC for 2007 and 2008 revealed an overstatement 

of disbursements in the amount of $687,536. The Audit staff recommends that NRL PAC 

submit any additional information or written comments it considers relevant to the matter. 

(For more detail, see p. 4) 

Finding 2. Disclosure of Occupation and Name of Employer 

A review of contributions fi:om individuals revealed that 1,044 contributions totaling $146,115 

lacked disclosure of the contributor's occupation and/or name of employer. Furthermore, NRL 

PAC did not document "best efforts" to obtain, maintain, and submit information for most of 

these contributions. The Audit staff reconmiends that NRL PAC contact each contributor that is 

missing the occupation and/or name of employer information, submit evidence of such contact, 

and disclose any information received. (For more detail, see p. 7) 
Part IV 

Findings and Recommendations 

I Finding 1. Misstatement of Financial Activity 

Summaiy 

A comparison of NRL PACs reported figures with bank records revealed a material 

misstatement of receipts and cash-on-hand in 2007 and disbursements and cash-on-hand in 2008. 

For 2007, NRL PAC overstated beginning cash-on-hand by $130,931, understated receipts by 

$29,624, and overstated ending cash-on-hand by $104,632. In 2008, NRL PAC overstated 

disbursements by $1,437,635 and understated the ending cash-on-hand by $1,300,378. The 

Audit staff recommends that NRL PAC amend its disclosure reports to correct the misstatements 

for both 2007 and 2008. 

In addition, tfae original reports filed by NRL PAC for 2007 and 2008 revealed an overstatement 

of disbursements in the amount of $687,536. The Audit staff reconmiends that NRL PAC 

submit any additional information or written comments it considers relevant to the matter. 

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), Schedule B 

(Itemized Disbursements), or Schedule E (Independent Expenditures). 2 U.S.C. §434(b)(l), 

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

Facts and Analysis 

A. Misstatement of Activity on Amended Reports as Compared with Bank Records 

1. Facts 

The Audit staff reconciled reported activity with bank records for calendar years 2007 and 

2008. The following charts outline the discrepancies for the beginning cash balances, 

receipts, disbursements, and the ending cash balances for each year. Succeeding paragraphs 

address the reasons for the misstatements. 
2007 Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

©January 1,2007 

$612,737 $481,806 $130,931 

Overstated 

Receipts $53,518 $83,142 ($29,624) 

Understated 

Disbursements $102,266 $105,590 ($3,324) 

Understated 

Ending Cash Balance 

@ December 31,2007 

$563,989 $459,358 $104,631 

Overstated 

The overstatement of the beginning cash-on-hand by $130,931 likely resulted fi'om prior 

period discrepancies. 

The understatement of receipts resulted fi'om the following: 

• Bank interest not reported 

• Vendor refimds for radio ads not reported 

• Unexplained difference 

Understatement of receipts 

$ 14,771 

4,051 

10.802 

$ 29.624 

The misstatements described above resulted in a $104,632 overstatement of the ending 

cash-on-hand. 

2008 Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1,2008 

$563,990 $459,358 $104,632 

Overstated 

Receipts $3,626,011 $3,593,387 $32,625 

Overstated 

Disbursements $4,718,401 $3,280,766 $1,437,635 

Overstated 

Ending Cash Balance 

@ December 31,2008 

$(528,400) $771,978 $1,300,378 

Understated 

The overstatement of disbursements resulted fi'om the following: 

• Unreported disbursements 

• Disbursements to printing vendor that were reported twice 

• Over-reported disbursements 

• Unexplained difference 

Net overstatement of disbursements 

$ 184,070 

(1,526,656) 

(80,357) 

(14.692^ 

$ 1.437.635 

The duplicate reporting of $1,526,656 in disbursements to the printing vendor was due to 

incorrect reporting of independent expenditures. NRL PAC paid for these independent 
expenditures in advance of the dissemination dates. NRL PAC should have reported 

these advance payments on Schedule B, Line 21b, as operating expenditures. Once the 

printed materials were disseminated, the amounts of these expenditures were to be 

subtracted fi'om Line 21b and reported as independent expenditures on Schedule E. NRL 

PAC correctly reported these expenditures on Line 21b when the payments were made, 

then correctly disclosed the independent expenditures on Schedule E upon dissemination 

of the materials. However, NRL PAC failed to subtract the amount of the independent 

expenditures firom Line 21b. 

The misstatements described above resulted in a $1,300,378 understatement of the ending 

cash-on-hand. 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the misstatements for 2007 and 2008 with NRL PAC 

representatives during the exit conference and provided copies of relevant workpapers 

detailing the misstatements. NRL PAC representatives stated that the necessary amended 

reports would be filed. Amended reports filed by NRL PAC after the exit conference 

corrected some, but not all, of the misstatements. 

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

PAC take the following action: 

• Amend its reports to correct the misstatements noted above. 

• Reconcile the cash balance on its most recent report to identify any subsequent 

discrepancies that could affect the recommended adjustments, and adjust cash as 

necessary on its most recent report noting that the adjustment is the result of prior 

period adjustments. 

B. Misstatement of Activity Reported on Original Reports as Compared with Bank 

Records 

1. Facts 

In addition to examining the most recent reports filed by NRL PAC prior to the audit, the 

Audit staff compared the original reports filed with the bank records and discovered a 

$687,536 overstatement of disbursements in 2007 and 2008. This misstatement was largely 

due to the incorrect reporting of independent expenditures as noted above. 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the misstatements for 2007 and 2008 with NRL PAC 

representatives during the exit conference and provided copies of relevant workpapers 

detailing the misstatements. 

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

PAC submit any additional information or written comments it considers relevant to the 

matter. 
I Finding 2. Disclosure of Occupation and Name of Employer 

Summary 

A review of contributions firom individuals revealed that 1,044 contributions totaling $146,115 

lacked disclosure of the contributor's occupation and/or name of employer. Furthermore, NRL 

PAC did not document "best efforts** to obtain, maintain, and submit information for most of 

these contributions. The Audit staff recommends that NRL PAC contact each contributor 

missing the occupation and/or name of employer, submit evidence of such contact, and disclose 

any information received. 

Legal standard 

A. Disclosure of Receipts. For each itemized contribution, the committee must provide the 

following information: 

• The fiill name and address (including zip code) of the contributor or other source; 

• The name of the contributor*s employer (if the contributor is an individual); 

• The contributor's occupation (if the contributor is an individual); 

• Election to which a contribution or loan was designated; 

• The date of receipt; 

• The amount; and 

• The aggregate election cycle-to-date of all receipts (within the same category) from the 

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

B. Best Efforts Ensures Compliance. When the treasurer of a political committee shows that 

the conmiittee used best efforts (see below) to obtain, maintain, and submit the information 

required by the Act, the conmiittee's reports and records will be considered in compliance 

with the Act. 2 U.S.C. §432(i). 

C. Definition of Best Efforts. The treasurer and the committee will be considered to have used 

"best efforts'* if the committee satisfied all of the following criteria: 

• All written solicitations for contributions included: 

o A clear request for the contributor's full name, mailing address, occupation, and name 

of employer; and 

o The statement that such reporting is required by Federal law. 

• Within 30 days after the receipt of the contribution, the treasurer made at least one effort 

to obtain the missing information, in either a written request or a documented oral 

request. 

• The treasurer reported any contributor information that, although not initially provided by 

the contributor, was obtained in a follow-up communication or was contained in the 

committee*s records or in prior reports that the committee filed during the same two-year 

election cycle. 11 CFR §104.7(b). 
Facts and Analysis 

A. Facts 

A review of itemized contributions from individuals revealed that 1,044 contributions totaling 

$145,615, or 29 percent of the dollar value of individual contributions itemized by NRL PAC, 

lacked disclosure of the contributor* s occupation and/or name of employer. NRL PAC disclosed 

most of these contributions with the notation "requested** or "Information Requested.*' 

For 708 of these contributions totaling $92,416, the committee provided no evidence that it had 

exercised "best efforts" to obtain, maintain, and submit the information. This represents the 

majority of the individual contributions lacking the required information. For the remaining 336 

(1,044 - 708) contributions totaling $53,699, NRL PAC obtained the required information. It 

did not, however, amend its reports to disclose the additional infonnation. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to NRL PAC representatives at the exit conference, along 

with the appropriate workpapers. In response, NRL PAC counsel stated that appropriate 

amended reports would be filed. Amended reports filed by NRL PAC after the exit conference 

reduced the dollar value of errors to $136,330, or 27 percent of the dollar value of individual 

contributions itemized by NRL PAC. 

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

take the following actions: 

• Provide documentation that it exercised best efforts to obtain, maintain and submit the 

required contributor information; or 

• Make an effort to contact those individuals lacking the required contributor information 

and provide documentation of such efforts (such as copies of letters/emails to the 

contributors and/or phone logs); and, 

• File amended Schedules A (Itemized Receipts) to disclose contributor information in 

NRL PACs possession as well as contributor information obtained in response to this 

recommendation.