' .. 1II • . 

THE FEDERAL ELECTTION COMMISSION^OiC HAY 23 AH S-5H 

Washington, DC 20463 

May 23,2018 

MEMORANDUM 

Toj 

Through; 

From: 

The Commission 

Alec Palmer 

Staff Director 

Patricia C. Orrock/^^2fP 

Chief Compliance OfGcer 

Thomas E. Hintermister 

Assistant Staff Director 

Audit Division 

By: 

Subject: 

Marty Favin 

Audit Manager 

Scott Dotzler 

Lead Auditor 

Audit Division Reconunendation Memorandum on Mike Bishop for 

Congress (MBFC) (A17-04) 

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

the Audit staff presented the Draft Final Audit Report (DFAR) to Mike Bishop for 

Congress on April 26,2018 (see attadiment). In re^nse to the DFAR, the committee 

did not provide any additional comments. Mike Bishop for Congress did not request an 

audit he»ring. 

This memorandum provides the Audit staffs recoirunendation for each finding outlined in 

the DFAR. The O^e of General Counsel has reviewed tiiis memorandum and concurs 

with the recommendation. 

Reporting of Debts and Obligations 

After the exit conference, the committee filed amended reports that materially 

complied with the recommendation. In response to the Interim Audit Report, the 

Treasurer stated that she had no formal response to the Interim Audit Report 

recommendation. In response to the DFAR, tee committee did not provide any 

additional comments. 
The Audit stair Fecommends that the Commission find that MBFC failed to 

disclose debts and obligations to ten vendors totaling $139,524. 

If this m^orandum is approved, a Proposed Final Audit Report will be prepared within 

30 days of die Commission's vote. 

In case of an objection, Directive No. 70 states tliat the Andit Division 

Recommendiation Memorandum will be plaeed on the next regularly scheduled open 

session i^nda. 

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

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

Attachment: 

- Draft Final Audit Report of the Audit Division on Mike Bishop for Congress 

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

Audit Division on Mike Bishop 

for Congress 

(January 1, 2015 - December 31, 2016) 

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; rnet 

the threshold 

requirements for 

substSntialjcbmpliance 

vy!it^e'Xct''i^ip^udit 

dbtemfiines whether th&j ' 

comihitt^e complied witjt^, 

the limitations, 

prohibitioh§)ind 

disclosure reqijifetnents j; 

of the Act. '<• '•••. /S'v ' 

Future Action"^^^ 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to the matter 

discussed in this report. 

About the Campaign (p. 2) 

Mike Bishop for Congress is the principal campaign committee 

for Mike Bishop, Ribpublid^n .candidate for the United States 

House of Representatives fr6ni!!the state of Michigan, 8"^ 

Congressipnk;! District, and is Kel^quartered in Brighton, 

Michigan. \Fbf more information, see the Campaign Organization 

' chart, p.2.-V}:^: 

\. •. 

Fiuancial Abti^ty (p. 2) 

Receipts 

9 Gqiitributions from Individuals 

9;. Contributions from Pblitical 

Comrmttibcs"-' • • ; •••••. • s I . • / 

o Transfe'rs from Other Authorized 

Cbihmittees 

o Other Receipts 

"Total RTOeipts 

••s 

1' 

•A ^ O 

Disbutaeinehts 

Operating Expenditures 

Contribution Refunds 

. Other Disbursements 

Total Disbursements 

$705,312 

924,834 

6,619 

3,305 

S 1,640,070 

$ 1,573,276 

100 

15,100 

S 1,588,476 

Finding and Recommendation (p. 3) 

• Reporting of Debts and Obligations 

' 52 U.S.C. §30111(b). 
Draft Final Audit Report of the 

Audit Division on Mike Bishop for 

Congress 

(January 1, 2015 - December 31, 2016) 

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Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Part II. Overview of Campaign 

Campaign Organization ^ 2 

Overviewof Financial Activity 2 

Part III. Summary . ' 

Finding and Recommendation ..'vv--, ^ 3 

X •••1 ••••• V -v;- Part IV. Finding and Recoiiim;endation ' 

Reporting ofDebts and Obligations 7 '\- . X 

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Parti 

Background 

Authority for Audit 

This report is based on an audit of Mike Bishop for Congress (MBFC), 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'aiidit under this subsection, the 

Commission must perform an internal review of reports .^led by selected committees to 

determine if the reports filed by a particular committee meefthe threshold requirements 

for substantial compliance with the Act. 52 U.S^C. §30111 (b).^^v. 

Scope of Audit 

Following Commission-approved procedui:es,.the Audit staff evaluated;V^rjous risk 

factors and as a result, this audit e>tamined: "v;' .. .. •V- ;' %:V.. 

1. the disclosure of disbursemehts,; debts and obiigatidnsii '' 

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

3. the consistency between reported figures and bank repqrds; 

4. the completeness of records; and' :.;. x 

5 . other committee, o^fa^ipns necessii^..to the reyjeyy;. . ^ 

N:X\ 
Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Date of Registration April 4,2014; 

• Audit Coverage January 1, 201S - December 31,2016 

Headquarters Brighton;: Michigan 

Bank Information ..v, •••••• • v.-

• Bank Depositories ^C»he 

• Bank Accounts One checking 

Treasurer 

• Treasurer When Audit Was Conducted Valerie Tillstrom "'•' -. 

• Treasurer During Period Covered by Audit Valerie Tillstrom '. 

Management Information ••••.• =•• 

• Attended FEC Campaign Finance" Slerhinar^. No 

• Who Handled Accounting and 

Recordkeeping TasksTl.. 

-s.. .*• V * • 1 

Paid Staff • 

•J 

of FinsBLncial Activity 

• •• •r.'C > — . . . % 

I 

V ^ i|;fku(dited Aiiipunts) 

s ^ 

Cash-bii;hand ® January 1,201^ ^ - $ 40,589 

Receipt^sy;, 

0 Contributidns from Individuals 705,312 

0 Contributions from PoliticaliCommittees 924,834 

0 Transfers from Other Authbrized 

Committees 

6,619 

0 Other Receipts ' V- i:' 3,305 

Total Receipts ' $ 1,640,070 

Disbursements 

0 Operating Expenditures 1,573,276 

0 Contribution Refunds 100 

0 Other Disbursements 15,100 

Total Disbursements $ 1,588,476 

Cash-on-hand @ December 31,2016 $ 92,183 
Part III 

Summary 

Finding and Recommendation 

Reporting of Debts and Obligations 

During audit fieldwork, the Audit staif noted that MBFC f^d to disclose debts and 

obligations to ten vendors totaling $139,524. Subsequent^-^he exit conference, MBFC 

amended its disclosure reports to include these debts an&^figations on Schedule D 

(Debts and Obligations) which materially correcte^jn^j^Hg record. The Treasurer 

stated that she had no formal response to the Int^i^tud^j^^rt recommendation. (For 

more detail, see p. 4.) 
Part IV 

Finding and Recommendation 

I Reporting of Debts and ObUgatloM 

Summary 

During audit fieidwork, the Audit staff noted that MBFC failed to disclose debts and 

obligations to ten vendors totaling $139,524. Subsequent to the exit conference, MBFC 

amended its disclosure reports to include these debts and obligations on Schedule D 

(Debts and Obligations) which materially corrected the public record. The Treasurer 

stated that she had no formal response to the Interim Audit Report recommendation. 

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. 

52 U.S.C. §30104(b)(8) and 11 CFR §§l04.3(d) and 104.11(a). 

B. Separate Schedules. A political committee must file separate schedules for debts 

owed by the cominittee and debts owed to the committee, together with a statement 

explaining the circumstances and conditions under which each debt and obligation 

was incurred or extinguished. 11 CFR § 104.11 (a). . 

C. 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 date of the transaction); the committee reports it on the next 

regularly ^hedul^ report. 

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

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

Facts and Analsrsis 

A. Facts 

During audit fieldwbrk, the. Audit staff reviewed MBFC's disbursement records and 

disclosure reports for proper reporting of debts and obligations. This review identified 

debts owed to ten vendors totaling $139,524^ that MBFC failed to report on Schedule D 

during the audit period. Based on a review of the records, these vendors mainly provided 

advertising, solicitation/fundraising and consulting services. The Audit staff calculated 

the debts owed to the vendors based on the invoice date and the subsequent payment date. 

Debts were outstanding for periods ranging from 23^ to 186 days. 

B. Interim Audit Report & Audit Division Recommendation 

- Each debt in this amount was counted only once even if it was required to be disclosed over multiple periods. 

^ Three debts were outstanding for 23,24, and 29 days, respectively. Each of these items were outstanding 

at the end of reporting periods and therefore reportable. 
The Audit staff discussed the reporting of debts and obligations with MBFC 

representatives at the exit conference and provided a schedule detailing the transactions 

requiring disclosure on Schedule D. MBFC representatives acknowledged they 

understood the schedule and would submit corrective amended disclosure reports. 

Subsequent to the exit conference, MBFC amended its disclosure reports to include these 

debts and obligations on Schedule D which materially corrected the public record. 

The Interim Audit Report recommended that MBFC provide any additional comments it 

may have with respect to this matter. 

C. Committee Response to Interim Audit Report ,^ 

The Treasurer stated that she had no formal response.tp Ae: Interim Audit Report 

recommendation. ^ • • ^ V. 

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