Final Audit Report of the 

Commission on the Utah 

Republican Party 

(January 1, 2011 - December 31, 2012) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political conunittee 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 Republican Party 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. 3) 

Receipts 

o Contributions from Individuals 

and Political Committees $.753,650 

o Transfers from Affiliated and 

Other Political Committees 1,119,025 

o Transfers fn)m Non-Federal 

Accounts 880,121 

o Other Receipts 114,894 

Total Receipts $ 2,867,690 

Disbursements 

o Operating Expenditures S 2,388,485 

o Federal Election Activity 390,806 

o Transfers to Affiliated and Other 

Political Committees 9,152 

o Other Disbursements 38,475 

Total Disbursements $ 2,826,918 

Commission Findings (P-4) 

• Receipt of Prohibited Contributions (Finding 1) 

• Receipt of Contributions that Exceed Limits (Finding 2) 

• Misstatement of Financial Activity (Finding 3) 

• Recordkeeping for Employees (Finding 4) 

• Reporting of Debts and Obligations (Finding S) 

• Apparent Excessive Contribution - Staff Advance (Finding 6) 

Additional Issue (p. 6) 

• Recordkeeping for Employees 

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

Commission on the Utah 

Republican Party 

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

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Commission Guidance 1 

Audit Hearing 2 

Part II. Overview of Committee 

Committee Organization 3 

Overview of Financial Activity 3 

Part III. Summaries 

Commission Findings 4 

Additional Issue 6 

Part IV. Commission Findings 

Finding 1. Receipt of Prohibited Contributions 7 

Finding 2. Receipt of Contributions that Exceeds Limits 10 

Finding 3. Misstatement of Financial Activity 13 

Finding 4. Recordkeeping for Employees 16 

Findings. Reporting ofDebts and Obligations 18 

Finding 6. Apparent Excessive Contribution- Staff Advance 22 

Part V. Additional Issue 

Recordkeeping for Employees 26 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Utah Republican Party (URP), 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 me^ 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 and loans; 

2. the receipt of contributions from prohibited sources; 

3. the disclosure of contributions received; 

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; and 

8. other coimnittee 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 Program for Requesting 

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

uiiaffiliated with URP 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)(l) were required for employees paid with 100 

percent federal fimds. 

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 fiiiids. 

Exercising its prosecutorial discretion, however, the Commission decided it will 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 URP representatives of the payroll requirement and 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 URP employees paid with 

100 percent federal funds and reported as such. 
Audit Hearing 

URP declined the opportunity for a hearing before the Commission on the matters 

presented in this report. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration March 16,1978 

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

Headquarters Salt Lake City, Utah 

Bank Information 

• Bank Depositories One 

• Bank Accounts Four Federal and Two Non-Federal 

Treasurer 

• Treasurer When Audit Was Conducted Dave Crittenden (9/20/13 - 5/05/14) 

Cameron Robinson (5/06/14 -12/10/15) 

Abram Young (12/11/15 - Present) 

• Treasurer During Period Covered by Audit Mike McCauley 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

Yes 

e Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff and Treasurer 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand ® January 1,2011 S 421 

Receipts 

o Contributions from Individuals and Political 753,650 

Committees 

. o Transfers from Affiliated and Other Political 1,119,025 

Committees 

o Transfers from Non-Federal Accounts 880,121 

o Other Receipts. 114,894 

Total Receipts $2,867,690 

Disbursements 

o Operating Expenditures 2,388,485 

o Federal Election Activity 390,806 

o Transfers to Affiliates and Other Political 9,152 

Committees 

o Other Disbursements 38,475 

Total Disbursements $2,826,918 

Cash-on-hand @ December 31,2012 $ 41,193 
Part III 

Summaries 

Commission Findings 

Finding 1. Receipt of Prohibited Contributions 

During audit fieldwork, a review of contributions revealed that URP deposited five 

apparent prohibited contributions totaling $23,600 into its federal account. URP 

transferr^ $23,600 into a non-federal account, albeit in an untimely maimer, to correct 

this matter. In response to the Interim Audit Report reconunendation and the Draft Final 

Audit Report, URP did not provide any documentation to demonstrate the funds were 

transferred within thirty days of the date on which it discovered the contributions were 

prohibited. URP's counsel stated that URP has long since remedied the issue identified 

for this finding. The Audit staff concluded that URP untimely resolved prohibited 

contributions totaling $23,600. 

The Commission approved a finding that URP deposited in its federal account prohibited 

contributions totaling $23,600 that were untimely resolved. 

(For more detail, see p. 7.) 

Finding 2. Receipt of Contributions that Exceeds Limits 

During audit fieldwork, the Audit staff identified apparent excessive contributions from 

three individuals that exceeded contribution limits by $42,925. These errors occurred as 

a result of URP not resolving the excessive portion of the contributions by issuing a 

refimd to the contributor or making a transfer to a non-federal account in a timely 

manner. Subsequently, URP transferred the excessive portion of the contributions to a 

non-federal account, albeit untimely. In response to the Interim Audit Report 

recommendation and the Draft Final Aiulit Report, URP did not provide any 

documentation to demonstrate the funds were transferred within 60 days of receiving the 

excessive contributions. URP's counsel stated that URP has long since remedied the 

issue identified for this finding. The Audit staff concluded that URP untimely resolved 

excessive contributions totaling $42,925. 

The Commission approved a finding that URP accepted contributions that exceeded the 

limits by $42,925 and the funds were untimely resolved with a transfer to a non-federal 

account. 

(For more detail, see p. 10.) 

Finding 3. Misstatement of Financial Activity 

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

records revealed a misstatement of financial activity for receipts in 2011 totaling 

$107,013 and an overstated ending cash-on-hand balance totding $10,028. In addition, 

URP had a misstatement of receipts and disbursements for 2012. In 2012, URP 

understated its receipts and disbursements by $114,582 and $96,176, respectively. In 
response to the Interim Audit Report reconunendation, URP amended its disclosure 

reports to materially correct the misstatements for both 2011 and 2012. In response to the 

Draft Final Audit Report, URP's counsel stated that URP resolved the issue by amending 

its disclosure reports. 

The Commission approved a finding that URP misstated its financial activity for the 

calendar years 2011 and 2012. 

(For more detail, see p. 13.) 

Finding 4. Recordkeeping for Employees 

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

. monthly payroll logs, 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 

payments to URP employees totaling $285,242 for which URP did not maintain monthly 

payroll logs. This consisted of $269,776 for which payroll was allocated with federal and 

non-federal funds, and $15,466 for which payroll was exclusively paid with non-federal 

funds. URP stated it did not maintain monthly payroll logs during the 2012 election 

cycle but intends to maintain such payroll logs in the future. In response to the Interim 

Audit Report recpnunendation and the Draft Final Audit Report, URP's counsel stated 

that URP has long since remedied the issue identified for this finding. URP complied 

with the Interim Audit Report reconunendation by implementing a plan to maintain 

monthly payroll logs in the future. 

The Commission approved a finding that URP failed to maintain monthly payroll logs 

totaling $270,738, which consisted of $269,776 that URP disclosed as having been paid 

with an allocation of federal and non-federal funds and $962 that was paid from an 

exclusively non-federal account during periods in which the employee was also paid with 

federal funds. The Commission did not approve the portion of the recommended finding 

related to $14,504 in payroll paid exclusively with non-federal fluids, and, as such, these 

expenses are presented as an "Additional Issue." 

(For more detail, see p. 16.) 

Finding 5. Reporting of Debts and Obligations 

During audit fieldwork, the Audit staff noted that URP failed to disclose debts and 

obligations to five vendors and one staff member totaling $205,323 on Schedule D (Debts 

and Obligations). In response to the Interim Audit Report reconunendation, URP filed 

amended reports to disclose $101,711 of the $111,191 debts and obli^tions owed to the 

five vendors. However, URP did not disclose the debt totaling $94,132 for the staff 

member because it disagreed that these items should be considered as debt. In response 

to the Draft Final Audit Report, URP stated it already amended its disclosure reports as 

reconunended by the Audit staff. As a result of not reporting the staff member's debt, 

URP did not materially correct the reporting of debts and obligations. 

The Commission approved a finding that URP failed to disclose debts and obligations to 

five vendors and one staff member tottiling $205,323 on Schedule D. 

(For more detail, see p. 18.) 
Finding 6. Apparent Eaccessive Contribution-Staff Advance 

One URP staff member received reimbursements for credit card expenditures totaling 

$46,904 that appear to have been reimbursed untimely. URP did not provide the staff 

member's credit card billing statements to support the reimbursements were made within 

60 days after the closing date of the billing statement. In response to the Interim Audit 

Report recommendation and the I>raft Final Audit Report, URP stated it strongly 

disagreed with this assertion because URP was not aware of the reimbursable expenses 

when they were incurred. URP was only aware of the staff member's reimbursable 

expenses after he presented receipts and/or expense reports to the treasurer. And its 

regular practice was to issue staff reimbursements within a calendar week of presentation 

of such reports. URP did not provide any documentation to demonstrate the 

reimbursements were made within the proper time limitations. As such, of the $46,904 

untimely reimbursements to the staff member, the Audit staff considered $28,637 as 

excessive contributions from the staff member until the expenses were reimbursed. No 

further action will be taken since the staff member was eventually reimbursed for the 

expenses. 

The Corrunission approved a finding that URP accepted contributions fhim a staff 

member that exceeded the limits by $28,637 until the expenses were reimbursed by URP. 

(For more detail, see p. 22.) 

Additional Issue 

Recordkeeping for Employees 

As detailed in Finding 4 above, URP did not maintain any monthly payroll logs, as 

required, to document the percentage of time rach employee spent in connection with a 

federal election. For 2011 and 2012, the Audit staff identified payments to URP 

employees totaling $285,242 for which URP did not maintain monthly payroll logs. This 

consisted of $269,776 for which payroll was allocated with federal wd non-federal fimds, 

and $15,466 for which payroll was exclusively paid with non-federal funds. URP stated 

it did not maintain payroll logs during the 2012 election cycle but intends to maintain 

such payroll logs in the future. In response to the Interim Audit Report recommendation 

and the Draft Final Audit Report, URP's counsel stated that URP h^ long since remedied 

the issue identified for this finding. URP compiled with the Interim Audit Report 

recommendation by implementing a plan to maintain monthly payroll logs in the future. 

The Commission did not approve, by the required four votes, the portion of the Audit 

staffs recommended finding that URP failed to maintain monthly payroll logs for the 

$14,504 paid exclusively with non-federal funds during a given monA. Pursuant to 

Commission Directive 70,^ these expenses are discussed in the "Additional Issue" 

section, and the payroll expenditures of $14,504 are not included in Finding 4. 

(For more detail, see p. 26.) 

Available at http://www.fec.gov/diFetives/directive_70.pdf 
Part IV 

Commission Findings 

Finding 1. Receipt of Prohibited Contributions , 

Sumniaiy 

During audit fieldwork, a review of contributions revealed that URP deposited five 

apparent prohibited contributions totaling $23,600 into its federal account. URP 

transferred $23,600 into a non-federal account, albeit in an untimely manner, to correct 

this matter. In response to the Interim Audit Report recommendation and the Draft Final 

Audit Report, URP did not provide any documentation to demonstrate the fimds were 

transferred within thirty days of the date on which it discovered the contributions were 

prohibited. URP's counsel stated that URP has long since remedied the issue identified 

for this finding. The Audit staff concluded that URP untimely resolved prohibited 

contributions totaling $23,600. 

The Commission approved a finding that URP deposited in its federal account prohibited 

contributions totaling $23,600 that were untimely resolved. 

Legal Standard 

A. Receipt of Prohibited Corporate Contributions. Political committees may not 

accept contributions from the general treasury funds of corporations. This prohibition 

applies to any type of corporations including a non-stock corporation, as incorporated 

membership organization, and an incorporated membership organization, and an 

incorporated cooperative. 52 U.S.C. §30118. 

B. Receipt of Prohibited Contributions - General Prohibition. Candidates and 

committees may not accept contributions (in the form of money, in-kind contributions 

or loans): 

1. In the name of another; or 

2. From the treasury funds of the following prohibited sources: 

• Corporations (this means any incorporated organization, including a nonstock corporation, an incorporated membership organization, and an 

incorporated cooperative); 

• Labor Organizations; or 

• National Banks; 

3. Federal Government Contractors (including partnerships, individuals, and sole 

proprietors who have contracts with the federal government); and 

4. Foreign Nationals (including individuals who are not U.S. citizens and not 

lawfully admitted for permanent residence; foreign governments and foreign 

political parties; arid groups organized under the laws of a foreign country or 

groups whose principal place of business is in a foreign country, as defined in 22 

U.S.C. §611(b)). 52 U.S.C. §§30118,30119,30121, and 30122. 
-C. Questionable Contributions. If a committee receives a contribution that appears to 

be prohibited (a questionable contribution), it must follow the procedures below: 

1. Within 10 days alter the treasurer receives the questionable contribution, the 

committee must either: 

• Return the contribution to the contributor without depositing it; or 

• Deposit the contribution (and follow the steps below). 11 CFR 

§103.3(b)(l). 

2. If the.conunittee deposits the questionable contribution, it may not spend the 

funds and must be prepared to refund them. It must therefore maintain sufficient 

funds to make the refimds or establish a separate account in a campaign 

depository for possibly illegal contributions. 11 CFR §103.3 (b)(4). 

3. The committee must keep a written record explaining why the contribution may 

be prohibited and must include this information when reporting the receipt of the 

contribution. 11 CFR §103.3(b)(S). 

4. Within 30 days of the treasurer's receipt of the questionable contribution, the 

committee must make at least one written or oral request for evidence that the 

contribution is legal. Evidence of legality includes, for example, a written 

statement from the contributor explaining why the contribution is legal or an oral 

explanation that is recorded by the committee in a memorandum. 11 CFR 

§103.3(b)(l). 

5. Within these 30 days, the committee must either: 

• Confirm the legality of the contribution; or 

• Refund the contribution to the contributor and note the refund on the 

report covering the period in which the refund was made. 11 CFR 

§103.3(b)(l). 

D. Federal v. Nonfederal Account. The federal account may contain only those funds 

that are permissible under the federal election law; the nonfederal account may 

contain funds 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 

fiom prohibited sources, such as corporations and labor organizations. 11 CFR 102.5 

(a)(l)(i)and(a)(3). 

E. Late Discovery of Prohibited Contribution. If the treasurer in exercising his or her 

responsibilities under 11 CFR 103.3(b) determined that at the time a contribution was 

received and deposited, it did not appear to be made by a corporation, labor 

organization, foreign national or Federal contractor, or made in the name of another, 

but later discovers that it is illegal based on new evidence not available to the political 

coimnittee at the time of receipt and deposit, the treasurer shall refund the 

contribution to the contributor within thirty days of the date on which the illegality is 

discovered. If the political committee does not have sufficient fVmds to refund the 

contribution at the time of the illegality is discovered, the political committee shall 

make the refund from the next funds it receives. 11 CFR 103.3(b)(2). 
Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed contributions to URP from other 

political committees and identified five contributions totaling $23,600 from apparent 

prohibited sources. Each of these contributions appeared to be fix)m corporations; 

however, the Audit staff could not verify the corporate tax status with the Utah Secretary 

of State. It is noted that the state of Utah allows unlimited contributions from 

corporations. In accordance with 11 CFR § 103.3(b)(4), URP deposited these 

questionable funds into its federal account and maintained sufficient federal funds to 

refund them. 

Prior to notification of the audit, URP realized the questionable funds were in fact 

prohibited contributions that were mistakenly deposited into the federal account and 

subsequently transferred $20,000 of the $23,600 in prohibited contributions to a nonfederal account. The transfer was made more than Airty days from discovering the 

contributions were prohibited pmauant to 11 CFR § 103.3(b)(2). Therefore, at the 

conclusion of audit fieldwork, the $20,000 transfer was considered untimely resolved and 

the amount of prohibited contributions totaling $3,600 remained unresolved for two of 

the contributors. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with URP representatives during the exit conference 

and provided a schedule of the apparent prohibited contributions identified in the review. 

URP representatives stated that some of the prohibited contributions had already been 

resolved and that the supporting documents have already been provided to the Audit staff. 

In response to the exit conference, URP representatives reiterated that a $20,000 transfer 

had already been made to a non-federal account to resolve three prohibited contributions. 

For the remaining prohibited amount, URP stated it would disgorge the $3,600 at its. 

earliest opportunity to comply with the Audit staffs recommendation. URP transferred 

the remaining $3,600 prohibited contributions from the federal account to a non-federal 

account on August 11,201S. The transfers, totaling $23,600, were untimely. 

The Interim Audit Report recommended URP demonstrate that transfers totaling $23,6.00 

to resolve the impermissible contributions were made within thirty days of the date on 

which it discovered the contributions were prohibited. Absent such a demonstration, the 

Audit staff would conclude that URP transferred the prohibited contributions totaling 

$23,600 in an untimely manner. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, URP's counsel stated that URP 

has long since remedied the issue identified for this finding. URP did not provide any 

documentation to demonstrate the funds were transferred within thirty days of the date on 

which it discovered the contributions were prohibited. The Audit staff concluded that 

URP untimely resolved prohibited contributions totaling $23,600. 
10 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that URP untimely resolved prohibited 

contributions totaling $23,600 by making transfers to a non-federal account. 

E. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, URP stated the issue identified in the finding 

was remedied. 

Commission Conclusion 

On December 1,2016, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that URP 

deposited in its federal account prohibited contributions totaling $23,600 that were 

untimely resolved. 

The Commission approved the Audit staffs recommendation. 

Finding 2. Receipt of Contributions that ESxceeds Limits 

Summary 

During audit fieldwork, the Audit staff identified apparent excessive contributions from 

three individuals that exceeded contribution limits by $42,925. These errors occurred as 

a result of URP not resolving the excessive portion of the contributions by issuing a 

refund to the contributor or making a transfer to a non-federal account in a timely 

manner. Subsequently, URP transferred the excessive portion of the contributions to a 

non-federal account, albeit imtimely. In response to the Interim Audit Report 

recommendation and the Draft Final Audit Report, URP did not provide any 

documentation to demonstrate the funds were transferred within 60 days of receiving the 

excessive contributions. URP's counsel stated that URP has long since remedied the 

issue identified for this finding. The Audit staff concluded that URP untimely resolved 

excessive contributions totaling $42,925. 

The Commission approved a finding that URP accepted contributions that exceeded the 

limits by $42,925 and the funds were untimely resolved with a transfer to a non-federal 

account. 

Legtd Standard 

A. Party Committee Limits. For the 2012 election cycle, a party committee may 

not receive more than a total of $10,000 per year fiom any one contributor. 

52 U.S.C. §30116(a)(1)(D) and 11 CFR §110.9. 

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

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

1. Return the questionable check to the donor; or 

2. Deposit the check into its federal account and: 
11 

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

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

• Include the explanation on Schedule A if the contribution has to be itemized 

before its legality is established; 

• Seek a reattribution of the excessive portion, following the instructions provided 

in Commission regulations (see below for explanation of reattribution); and 

• If the coimnittee does not receive a proper reattribution within 60 days after 

receiving the excessive contribution, refund the excessive portion to the donor. 

11 CFR §§103.3(b)(3),(4) and (5) and 110.1(k)(3)(ii)(B). 

C. Joint Contributions. Any contribution made by more than one person (except for a 

contribution made by a partnership) must include the signature of each contributor on 

the check or in a separate writing. A joint contribution is attributed equally to each 

donor unless a statement indicates that the funds should be divided differently. 

11 CFR§110.1(k)(l)and(2). 

D. Reattribution of Excessive Contributions. Commission regulations permit 

committees to ask donors of excessive contributions whether they had intended dieir 

contribution to be a joint contribution fn)m more than one person and whether they 

would like to reattribute the excess amount to the other contributor. The committee 

must inform the contributor that: 

1. The reattribution must be signed by both contributors: 

2. The reattribution must be received by the committee within 60 days after the 

committee received the original contribution; and 

3. The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(k)(3). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper reattribution or refund the excessive portion to the donor. 11 CFR 

§§ 103.3(b)(3) and 110.1(k)(3)(ii)(B). Further, a political committee must retain 

written records concerning the reattribution in order for it to be effective. 11 CFR 

§110.1(0(5). 

Facts and Analysis 

A. Facts 

The Audit staffs review of contributions indicated that URP deposited apparent 

excessive contributions from three individuals totaling $42,925 into its federal account. 

These excessive contributions were a result of URP not refunding or transferring the 

excessive portion to a non-federal account in a timely manner. URP did maintain 

sufficient funds in its federal accounts to make the refunds during the audit cycle. The 

three individuals each made the contributions in 2012 with checks imprinted with single 

accountholders. It is unclear if the contributors intended their contributions to be for 

URP's federal or non-federal accounts. 

Prior to notification of the audit, URP realized the contributions were excessive. URP 

reported the $42,925 as federal contributions on Schedule A (Itemized Receipts) as well 
12 

as debt to the non-federal account on Schedule D (Debts and Obligations). In order to 

resolve the excessive portions, URP subsequently made transfers totaling $42,925 to a 

non-federal account in January and April 2014. However, the transfers were required to 

be made within 60 days of receipt of die original contributions and were therefore 

considered untimely. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter at the exit conference and provided URP 

representatives a schedule of the apparent excessive contributions. URP representatives 

stated the contributions were deposited into the federal account but should have been 

deposited into a non-federal account. Once discovered, URP reported the transactions as 

debt owed to a non-federal account until the transfers were made. URP representatives 

added that documentation had already been provided to the Audit staff. 

In response to the exit conference, URP representatives stated they have already taken 

corrective action and did not believe any fhrther remedial measures were needed at that' 

time. Supporting documentation was also provided. The Audit staff acknowledged the 

subsequent transfers totaling $42,925 to a non-federal account as a remedy for the 

excessive amount was made in an untimely manner. 

The Interim Audit Report recommended URP demonstrate that the funds were transferred 

timely (within 60 days of receiving the excessive contribution). Absent such a 

demonstration, the Audit staff would conclude that URP transferred the $42,925 

excessive contributions in an untimely manner. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, URP's counsel stated that URP 

has long since remedied the issue identified for this flnding. URP did not provide any 

documentation demonstrating the funds were transferred within 60 days of receiving the 

excessive contributions. The Audit staff concluded that URP untimely resolved 

excessive contributions totaling $42,925. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that URP untimely resolved the excessive 

contributions totaling $42,925 by making transfers to a non-federal account. 

E. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, URP stated the issue identified in the finding 

was remedied. 

Commission Conclusion 

On December 1,2016, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that URP 

accepted contributions that exceeded the limits by $42,925 and the funds were untimely 

resolved with a transfer to a non-federal account. 

The Commission approved the Audit staffs recommendation. 
I Finding 3. Misstatement of Financial Activity J 

Summary 

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

records revealed a misstatement of financial activity for receipts in 2011 totaling 

$107,013 and an overstated ending cash-on-hand balance totting $10,028. In addition, 

URF had a misstatement of receipts and disbursements for 2012. In 2012, URP 

understated its receipts and disbursements by $114,582 and $96,176, respectively. In 

response to the Interim Audit Report reconunendation, URP amended its disclosure 

reports to materially correct the misstatements for both 2011 and 2012. In response to the 

Draft Final Audit Report, URP's counsel stated that URP resolved the issue by amending 

its disclosure reports. 

The Commission approved a finding that URP misstated its financial activity for the 

calendar years 2011 and 2012. 

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 Analsrsis 

A. Facts 

As part of audit fieldwork, the Audit staff reconciled URP's reported financial activity 

with its bank records for 2011 and 2012. For the 2011 bank reconciliation, the Audit 

staff identified a misstatement of receipts and of the ending cash-on-hand beilance. For 

the 2012 bank reconciliation, URP understated both its receipts and disbursements. The 

following charts detail the discrepancies between URP's disclosure reports and its bank 

records, and the succeeding paragraphs explain why the discrepancies occurred. 

2011 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2011 

$183 $421 $238 

Understated 

Receipts $542,049 $532,991 $9,058 

Overstated 

Disbursements $537,131 $538,339 $1,208 

Understated 

Ending Cash Balance @ 

December 31,2011 

$5,101 ($4,927) $10,028 

Overstated 
14 

Receipts in 2011 were overstated by $9,058. However, when evaluating the identified 

errors, regardless of whether the errors were positive or negative (absolute value), the 

receipts were misstated by $107,013. In addition, the $10,028 overstatement of ending 

cash-on-hand balance resulted firom the following adjustments that should be made to 

correct the reporting of receipts totaling $107,013: 

Transfers from non-federal accounts, over reported 

Transfers from non-federal accounts, not reported 

Contributions from individuals, not reported 

Contributions over reported (not supported by a deposit) 

Unitemized contributions, over reported 

Sum of Reporting Adjustments 

$36,301 

49,026 

25 

15,500 

6.161 

S 107.013 

2012 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2012 

$5,101 ($4,927) $10,028 

Overstated 

Receipts $2,220,117 $2,334,699 $114,582 

Understated 

Disbursements $2,192,403 $2,288,579 $96,176 

Understated 

Ending Cash Balance @ 

December 31,2012 

$32,816' $41,193 $8,377 

Understated 

The understatement of receipts resulted fix)m the following: 

• Transfers from non-federal accounts, over reported ($20,584) 

• Transfer from non-federal accounts, not reported 133,058 

• Contributions from political committees, individuals & refunds 

not reported 66,758 

• Contributions from individuals and political committees 

over reported (15,668) 

• Unitemized contributions, over reported (11,3 51) 

• Unexplained differences (37.6311 

Net Understatement of Receipts $ 114.582 

The understatement of disbursements resulted from the following: 

• Payroll and payroll taxes, not reported $48,105 

• Bank fees, not reported 1,387 

• Vendor payments, transfers to the non-federal account, 

and other disbursements, not reported 75,201 

• Bank fees, over reported (5,887) 

• Operating disbursements, over reported (2,695) 

• Federal Election Activity, over reported (1,173) 

' This total does not foot due to dollar amount rounding. 
15 

• Transfers to affiliated/other party committees, over reported (904) 

• Unexplained differences 117.8581 

Net Understatement of Disbursements S96.176 

The $8,377 understatement of the ending cash-on-hand balance resulted from the 

misstatements described above. 

B. Interim Audit Report & Audit Division Reconimendation 

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

provided supporting schedules of the misstatements. URP representatives asked 

questions for clarification and stated they may amend the reports if they determined the 

supporting schedules provided by the Audit staff were correct. 

In response to the exit conference, URP representatives stated they would amend the 

reports "at a time the Commission deems appropriate, in accordance with the Audit 

Division's instructions." 

The Interim Audit Report recommended URP amend its disclosure reports to correct the 

misstatements noted above and reconcile the cash-on-hand balance on its most recent 

report to identify any subsequent discrepjEincies that could affect the recommended 

adjustments. The Interim Audit Report further recommended that URP adjust the cashon-hand balance as necessary on its most recent report, noting that the adjustment was the 

result of prior-period audit adjustments. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, URP amended its disclosure 

^orts to materially correct the misstatements for both 2011 and 2012 reports'. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that URP amended its disclosure reports to 

materially correct the misstatements for both 2011 and 2012. 

E. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, URP stated the issue was remedied by 

amending its disclosure reports. 

Commission Conclusion 

On December 1,2016, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission ftnd that URP 

misstated its financial activity for calendar years 2011 and 2012. 

The Commission approved the Audit staffs recommendation. 
16 

Finding 4. Recordkeeping for Employees 

Summary 

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

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

spent in connection vnth a federal election. For 2011 and 2012, the Audit staff identified 

payments to URP employees totaling $285,242 for which URP did not maintain monthly 

payroll logs. This consisted of $269,776 for which payroll was allocated with federal and 

non-federal funds, and $15,466 for which payroll was exclusively paid with non-federal 

funds. URP stated it did not maintain monthly payroll logs during the 2012 election 

cycle but intends to maintain such payroll logs in the future. In response to the Interim 

Audit Report recommendation and the Draft Final Audit Report, URP's counsel stated 

that URP has long since remedied the issue identified for this finding. URP complied 

with the Interim Audit Report recommendation by implementing a plan to maintain 

monthly payroll logs in the future. 

The Commission approved a finding that URP failed to maintain monthly payroll logs 

totaling $270,738, which consisted of $269,776 that URP disclosed as having been paid 

with an allocation of federal and non-federal fimds and $962 that was paid from an 

exclusively non-federal account dunng periods in which the employee was also paid with 

federal fimds. The Commission did not approve the portion of Ae recommended finding 

related to $14,504 in payroll paid exclusively with non-federal fimds, and, as such, these 

expenses are presented as an "Additional Issue." 

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 fnnge 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 fix)m 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 month on federal 

election activities may be paid entirely with funds that comply with state law. 11 

CFR §106.7(d)(l). 

Facts and Analsrsis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbursements for payroll. URP did not 

maintain any monthly payroll logs or equivalent records to document the percentage of 

time each employee spent in connection with a federal election. These logs are required 

to document the proper allocation of federal and non-federal funds used to pay employee 
17 

salaries and wages. For 2011 and 2012, URP did not maintain monthly logs for 

$285,242'* in payroll. This amount includes payroll paid as follows to URP employees. 

1. Employees reported on Schedule H4 (Disbursements for Allocated 

Federal/Non-Federal Activity) and paid with federal and non-federal funds 

during the same month (totaling $269,776); 

2. Employees reported on Schedule H4 and also paid with 100 percent nonfederal funds during the same month (totaling $962); and 

3. Employees paid exclusively with non-federal funds in a given month (totaling 

$14,504). 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the recordkeeping requirement with URP representatives 

during the exit conference. URP representatives stated they believed the payroll was 

allocated correctly. URP did not locate any payroll logs and noted that the plan moving 

forward is to keep payroll logs. 

In response to the exit conference, URP representatives stated that the "[pjarty undertook 

efforts to ensure that staff time and other expenses were properly allocated between its 

federal and non-federal accounts. The Party did not however, maintain monthly payroll 

logs during the 2012 election cycle." URP representatives further stated they intended to 

maintain such payroll logs in the future. 

URP submitted an affidavit fixrm the executive director during the 2011-2012 audit cycle 

stating that identified employees did not spend more than 25 percent of their 

compensated work time on activities in cprmection with the federal election. The 

affidavit further stated that the executive director also did not spend more than 25 percent 

of his time on activities in connection with a federal election. 

The affidavit provided by URP did not resolve the recordkeeping finding because it did 

not document the time an employee spent in connection with a federal election. 

The Interim Audit Report recommended that URP provide evidence that it maintained 

monthly time logs to document the percentage of time an employee spent in connection 

with a federal election; or implement a plan to maintain monthly payroll logs in the 

future. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, URP's counsel stated that URP 

has long since remedied the issue identified for this finding. Again, in response to the 

exit conference, URP representatives stated they did not maintain monthly payroll logs 

but intend to maintain monthly payroll logs in the future. As such, URP complied with 

the Interim Audit Report recommendation by implementing a plan to maintain monthly 

payroll logs. 

* This total does not include payroll ibr employees paid with 100 peroent federal funds and reported as 

such (see Part I, Backgipund, Commission Guidance, and Request for Early Commission Consideration 

of a Legal Question, Page 1). Payroll amounts are stated net of taxes and fVinge benefits. 
18 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that URP did not maintain monthly payroll 

logs during the audit cycle totaling $285,242, but intends to maintain monthly payroll 

logs .in the future. 

E. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, URP stated the issue identified in the finding 

was remedied. 

Commission Conclusion 

On December 1,2016, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that URP 

failed to maintain monthly payroll logs totaling $285,242, as required, to document the 

percentage of time each employee spent in connection with a federal election. 

The Commission approved a finding that URP failed to keep monthly payroll logs 

totaling $270,738, which consisted of $269,776 that URP disclosed as having been paid 

with an allocation of federal and non-federal funds and $962 that was paid fiom an 

exclusively non-federal account during periods in which the employee was also paid with 

federal funds. The Commission did not approve the portion of the recotmnended finding 

related to the $14,504 in payroll paid exclusively with non-federal funds during a given 

month and, as such, the matter is presented in the "Additional Issue" section. 

Finding 5. Reporting of Debts and Obligations 

Summary 

During audit fieldwork, the Audit staff noted that URP failed to disclose debts and 

obligations to five vendors and one staff member totaling $205,323 on Schedule D (Debts 

and Obligations). In response to the Interim Audit Report recommendation, URP filed 

amended reports to disclose $101,711 of the $111,191 debts and obligations owed to the 

five vendors. However, URP did not disclose the debt totaling $94,132 for the staff 

member because it disagreed that these items should be considered as debt. In response 

to the Draft Final Audit Report, URP stated it already amended its disclosure reports as 

recommended by the Audit staff. As a result of not reporting the staff member's debt, 

URP did not materially correct the reporting of debts and obligations. 

The Commission approved a finding that URP failed to disclose debts and obligations to 

five vendors and one staff member totaling $205,323 on Schedule D. 

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 §§104.3(d) and 104.11(a). 

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

owed by the committee and debts owed to the committee, together with a statement 
19 

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 scheduled 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). 

D. Advances by Committee Staff and Other Individuals. 

1. Scope. This section applies to individuals who are not acting as commercial 

vendors. Individuals who are acting as commercial vendors shall follow the 

requirements of 11 CFR §§116.3 and 116.4. 

2. The treatment as contributions. The payment by an individual from his or her 

personal funds, including a personal credit card, for the costs incurred in 

providing goods or services to, or obtaining goods or services that are used by or 

on behalf of, a candidate or political committee is a contribution unless the 

payment is exempted under 11 CFR 100.79, it shall be considered a contribution 

by the individual unlessa) The payment is for the individual's transportation expenses incurred 

while traveling on behalf of a candidate or political committee of a 

political party or for usual and normal subsistence expenses incurred 

by an individual, other than a volunteer, while traveling on behalf of a 

candidate or political committee of a political party; and 

b) The individual is reimbursed within sixty days after the closing date of 

the billing statement on which the charges first appear if the payment 

was made using a personal credit card, or within thirty days after the 

date on which the expenses were inciured if a person^ credit card was 

not used. For purposes of this section, the closing date shall be the 

date indicated on the billing statement which serves as the cutoff date 

for determine which charges are included on that billing statement. In 

addition, "subsistence expense" includes only expenditures for 

pemonal living expenses related to a particular individual traveling on 

committee business, such as food or lodging. 11 §CFR 116.5(b). 

3. Treatment as debts. A political committee shall treat the obligation arising from 

a payment described in paragraph (b) of this section as an outstanding debt until 

reimbursed. 11 CFR §116.5(c). 

4. Settlement or forgiveness of the debt. The individual and political committee 

may agree to the total forgives of the debt (see 11 CFR §116.8) or settlement of 

the debt if less than the entire amount owed (See 11 CFR § 116.7),. provided that 

the requirements of 11 CFR §116.7 or §116.8, as appropriate, including the 

submission of the information specified in these sections and Commission review, 

are satisfied. The provision of this part shall not be construed to require the 

individual to forgive or settle the debt for less than the entire amount owed. 

5. Reporting. The political committee shall continue to report the obligation arising 

from the payment as a debt in accordance with 11 CFR §116.7(f) or until the 
20 

Commission has completed a review of the request to forgive the debt pursuant to 

11 CFR §116.8, or until the political committee pays the debt, whichever occurs 

first. IICFR§116.5. 

Facts and Analysis 

A. Facts. 

During audit fieldwork, the Audit staff reviewed URP's disbursement records and 

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

debts totaling $205,323^ that URP failed to report on Schedule D during the audit period 

concerning five vendors and one staff member.^ Based on the records, the five vendors 

totaling $111,191 provided mainly catering, mailings/printing services, software, 

equipment rental and administrative expenses. The Audit staff calculated the debts to the 

vendors based on the invoice date and Ae subsequent payment date. Most of the debts 

were greater than $500 and were outstanding for periods ranging from 31 to 416 days. 

The debt related to the staff member, totaling $94,132, was for reimbursements for 

committee expenses paid with the staff member's personal credit card. Most 

reimbursements were made more than 60 days fh)m the date of the expense per the 

reimbursement form. The debt amount for the staff member was calculated based on 

provided documentation consisting of an expense reimbursement form submitted by the 

staff member, and/or invoices. The Audit staff used the individual dates of incurrence 

listed on the expense reimbursement form. The Audit staff did not use the date the 

reimbursement form was submitted because this date was unknown. Documentation such 

as the staff member's credit card billing statements, requested by the Audit staff, was hot 

provided. URP provided one credit card statement with the closing billing date during 

fieldwork. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed the reporting of debts and obligations 

with URP representatives and provided a schedule detailing the transactions requiring 

disclosure on Schedule D. URP representatives acknowledged they understood the 

schedules for vendors. They further stated the staff member turned in the expense reports 

late so URP did not know when the expenses needed to be reimbursed or that the 

expenses had been incurred. Therefore, the expenses could not have been reported 

correctly. 

In response to the exit conference, URP representatives noted that most of the debt items 

were related to expense reimbursements paid to the staff member. URP representatives 

questioned the Audit staffs date calculation and stated they were not aware of the staff 

member's expenses until after receipts and/or expense reports were presented to the 

treasurer, which frequently occurred well after the underlying expenses were incurred. 

' Each debt in this amount was counted once even if it is a required disclosure over multiple periods. In 

order for URP to correctly file amended reports, schedules were provided that included the amount of 

each debt required to be reported for each reporting period. 

' The staff member is also discussed in Finding 6 for possible violation of 11 CFR §116.S(b), advances by 

committee staff considered a contribution. 
21 

URP Fepresentatives added the tegular practice was to issue reimbursements to the staif 

member within a calendar week of receipt of the expense reimbursement form. URP 

feels that the Audit staff should not consider these expenses as debt items from the date 

they were incurred since, generally, URP was not aware of the expense until well after 

the date of incurrence. 

The Audit staff acknowledged that providing this individual's credit card statements with 

the billing cycle closing date could have reduced some of the debt disclosure omissions 

for the staff member. However, unless copies of the credit card statements were provided 

to show the closing date of the billing cycle, the Audit staffs analysis would remain 

unchanged. URP offered no further comments on the five vendors representing $111,191 

of the undisclosed debt and obligations. 

The Interim Audit Report recommended URP provide documentation demonstrating the 

expenditures totaling $205,323 did not require reporting on Schedule D; or provide the 

st^ member's credit card billing statements with the closing date of the billing cycle: 

The Interim Audit Report further recommended that absent such documentation, URP 

amend its reports to disclose debts and obligations totaling $205,323 on Schedule D. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, URP filed amended reports to 

disclose $101,711 of the $111,191 in debts for the five vendors. However, URP did not 

disclose any of the staff member's debt totaling $94,132. URP restated they were not 

aware of the staff member's expenses until after receipts and/or expense reports were 

presented to the treasurer. The regular practice was to issue reimbursements within a 

calendar week of receipt of the expense reimbursement form. Therefore, URP did not 

think these expenses were debt. 

It is noted URP did not provide any documentation demonstrating the date it received the 

expense reimbursement forms from the staff member. Nor did URP provide the staff 

member's credit card billing statements with the closing date of the billing cycle. 

Without this information to document ritemative dates, the Audit staffs debt calculation 

continued to be based on the individual date of incurrence listed on the expense 

reimbursement forms provided during fieldwork. The total debt not reported was 

$103,612 ($94,132 + $9,480). As such, URP did not materially correct the reporting of 

debts and obligations. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that URP filed amended reports to disclose 

$101,711 of the debts and obligations owed to the five vendors, but did not materially 

correct the reporting of debts and obligations since it did not disclose any of the staff 

member's debt totaling $94,132 on Schedule D. 
22 

E. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, URP stated it already amended its disclosure 

reports as recommended by the Audit staff and continued to disagree that the $94,132 

owed to the staff member should be considered as debt. 

Commission Conclusion 

On December 1,2016, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended that the Commission find that URP 

failed to disclose debts and obligations to five vendors and one staff member totaling 

$205,323 on Schedule D. 

The Commission approved the Audit staffs recommendation. 

Finding 6. Apparent Excessive Contribution- Staff 

Advance 

Summary 

One URP staff member received reimbursements for credit card expenditures totaling 

$46,904 that appear to have been reimbursed untimely. URP did not provide the staff 

member's credit card billing statements to support the reimbursements were made within 

60 days after the closing date of the billing statement. In response to the Interim Audit 

Report recommendation and the Draft Final Audit Report, URP stated it strongly 

disagreed with this assertion because URP was not aware of the reimbursable expenses 

when they were incurred. URP was only aware of the staff member's reimbursable 

expenses after he presented receipts and/or expense reports to the treasurer. And its 

regular practice was to issue staff reimbursements within a calendar week of presentation 

of such reports. URP did not provide any documentation to demonstrate the 

reimbursements were made within the proper time limitations. As such, of the $46,904 

untimely reimbursements to the staff member, the Audit staff considered $28,637 as 

excessive contributions from the staff member until the expenses were reimbursed. No 

further action will be taken since the staff member was eventually reimbursed for the 

expenses. 

The Commission approved a finding that URP accepted contributions from a staff 

member that exceeded the limits by $28,637 until the expenses were reimbursed by URP. 

Legal Standard 

A. Advances by Committee Staff and Other Individuals. 

t. Scope. This section applies to individuals who are not acting as commercial 

vendors. Individuals who are acting as commercial vendors shall follow the 

requirements of 11 CFR §§116.3 and 116.4. 

2. The treatment as contributions. The payment by an individual from his or her 

personal funds, including a personal credit card, for the costs incurred in 

providing goods or services to; or obtaining goods or services that are used by or 

on behalf of, a candidate or political committee is a contribution unless the 
23 

payment is exempted under 11 CFR 100.79, it shall be considered a contribution 

by the individual unlessa) The payment is for the individual's transportation expenses inured 

while traveling on behalf of a candidate or political committee of a 

political party or for usual and normal subsistence expenses incurred 

by an individual, other than a volunteer, while traveling on behalf of a 

candidate or political conunittee of a political' party; and 

b) The individual is reimbursed within sixty days after the closing date of 

the billing statement on which the charges first appear if the payment 

was made using a personal credit card, or within thirty days after the 

date on which the expenses were incurred if a personal credit card was 

not used. For purposes of this section, the closing date shall be the 

date indicated on the billing statement which serves as the cutoff date 

for determine which charges are included on that billing statement. In 

addition, "subsistence expense" includes only expenditures for 

personal living expenses related to a particular individual traveling on 

committee business, such as food or lodging. 11 §CFR 116.S(b). 

3. Treatment as debts. A political committee shall treat the obligation arising from 

a payment described in paragraph (b) of this section as an outstanding debt until 

reimbursed. 11 CFR §116.S(c). 

4. Settlement or forgiveness of the debt. The individual and political committee 

may agree to the total forgives of the debt (see 11 CFR §116.8) or settlement of 

the debt if less than the entire amount owed (See 11 CFR §116.7), provided that 

the requirements of 11 CFR §116.7 or §116.8, as appropriate, including the 

submission of the information specified in these sections and Commission review, 

are satisfied. The provision of ^is part shall not be construed to require the 

individual to forgive or settle the debt for less than the entire amount owed. 

5. Reporting. The political committee shall continue to report the obligation arising 

from the payment as a debt in accordance with 11 CFR §116.7(f) or until the 

Commission has completed a review of the request to forgive the debt pursuant to 

11 CFR §116.8, or until the political committee pays the debt, whichever occurs 

first. 11 CFR §116.5. 

B. Travel Expenses Exceeding $2,000 Exemption. Payments for transportation 

expenses^ that exceed the $2,000 travel exemption are considered contributions unless 

the committee reimburses them: 

• Within 60 days®, if the payments were made on a credit card; or 

• Within 30 days, if the payments were made with cash or a check. 11 CFR 

§116.5(b) and 100.79(a)(2). 

C. Party Committee Limits. A party committee may not receive more than a total of 

$10,000 a year from any one contributor. 52 U.S.C. §30116(a)(1)(D). 

^ Including usual and normal subsistence expenses (such as food and lodging) incurred while traveling on 

behalf of the candidate. 

' Sixty days after the closing date of the credit card billing statement where the charge first appeared. 
24 

Facts and Analsrsis 

A. Facts 

During audit fieldwork, the Audit staff reviewed individuals who received 

reimbursements from URP. One staff member received reimbursements totaling 

$197,850 throughout the audit cycle for expenditures paid mostly with the employee's 

personal credit card.^ Of these reimbursements, $46,904 was more than 60 days fiom the 

date of the expense per the reimbursement form. The Audit staff calculated the days 

outstanding by using the individual dates of incurrence listed on the expense 

reimbursement form. Of the $46,904 untimely reimbursements, $28,637 ($46,904 -

$18,267) is considered an excessive contribution from the staff member, pursuant to 11 

CFR§116.5(b).'° 

URP provided invoices, receipts, and expense reimbursement forms to support the 

expenditures but provided only one credit card statement with the closing billing date 

during audit fieldwork. None of these untimely reimbursements were for travel expenses 

that were reimbursed within 60 days from the date of the expense per the reimbursement 

form, or within 30 days if paid wi^ cash or check, per 11 CFR§116.S(b) and 

100.79(a)(2). 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed the reimbursements for the one staff 

member and provided a schedule detailing the transactions (with the discussion of debts 

and obligations at Finding 5 above). URP representatives stated the staff member turned 

in the expense reports late so URP did not know when the expenses needed to be 

reimbursed or that the expenses had been incurred. 

In response to the exit conference, URP representatives questioned the Audit staffs date 

calculation and stated they were not aware of the staff member's expenses until after 

receipts and/or expense reports were presented to the treasurer, which frequently occurred 

well after the underlying expenses were incurred. URP representatives added the regular 

practice was to issue reimbursements to the staff member within a calendar week of 

receipt of the expense reimbursement form. 

The Audit staff acknowledged that providing this individual's credit card statements with 

the billing cycle closing date could have reduced the amount considered to be an 

excessive contribution from the employee. However, unless copies of the credit card 

statements with the billing cycle closing date were provided to demonstrate the 

reimbursements were timely, the Audit staffs analysis would remain unchanged. The 

' Based on the documentation provided, the Audit stafT could not verify if five transactions were paid using 

the employee's personal credit card versus cash or check. 

The untimely staff reimbursements totaled SS0,904. The amount was adjusted to $46,904 after applying 

the $4,000 travel allowance per 11 CFR § 100.79(a)(2). The amount was further adjusted because an 

individual may contribute up to $ 10,000 per year to a state party. The staff member contributed $ 1,733 

in 2011 and did not make a contribution to URP in 2012. Therefore, the staff member could have 

contributed $18,267 ($20,000 - $1,733). 
25 

$28,637 was considered an excessive contribution from the staff member until 

reimbursed. 

The Interim Audit Report reconunended URP provide documentation, such as the 

employee's credit card statement with the closing billing date, to demonstrate the 

reimbursements were timely. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, URP stated it strongly 

disagreed with this finding. URP restated it only became aware of the staff member's 

reimbursable expenses after he presented receipts and/or expense reports to the treasurer, 

which frequently occurred after the underlying expenses were incurred. In addition, URP 

said the regular practice was to issue staff reimbursements within a calendar week of 

presentation. Given this practice, URP felt the Commission should not consider these 

expenses as in-kind contributions as of the date they were incurred. 

The Audit staff maintained the closing date on the billing statement is important because 

it is used as the trigger date to determine if the expenses initially paid for by the staff 

member will result in a contribution to URP. Specifically, the Commission's regulations 

require payments by a committee staff member to be treated as contributions, unless the 

payments are exempt from the definition of contribution as unreimbursed transportation 

and subsistence expenses under 11 CFR §100.79 and 11 CFR §116.5(b). If the payments 

are not exempt, they are contributions unless (1) the payments are for a staff member's 

travel expense or subsistence expenses incurr^ while traveling on behalf of the 

committee, and (2) the committee reimburse the staff member within 60 days "after the 

closing date of the billing statement on which the charges first appear if the payment was 

made using a personal credit card, or within thirty days after the da^te on which the 

expenses were incurred if a personal credit card was not used". 11 CFR §116.5(b)(1) & 

(2). 

URP provided one credit card statement with a billing closing date. Given that most 

credit card statements are 30 days or one month in length, if the Audit staff was to infer 

the other closing dates based on the one credit card statement that was available with a 

closing date in lieu of the actual billing date, the total amount of excessive contributions 

from the staff member would no longer be material." However, inferring the closing 

date is not as precise as using the actual billing date. Without all the necessary credit 

card billing statements, the Audit staff caimot verify that the staff member was 

reimbursed within sixty days after the closing date of the billing statement. 

The Audit staff noted URP did not provide all the necessary credit card statements of the 

staff member with the closing billing dates, nor did URP provide documentation to 

demonstrate the date it received the expense reimbursement form. Without this 

documentation to show the reimbursements were made within the proper time limitations. 

" If the inferred billing date is used in lieu of the actual billing closing dates from the credit card statements 

as provided by the committee, the total amount of debts and obligations not disclosed for the staff 

member reduces from $94,132 to $44,613. See Finding S-Report of Debts and Obligations, page 18. 
26 

URP received excessive contributions totaling $28,637 from the staff member until the 

expenses were reimbursed. No further action will be taken since the staff member was 

eventually reimbursed for the expenses. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged URP disagreed the staff member's 

reimbursements should be considered excessive contributions. But without the necessary 

documentation to show the reimbursements to the staff member were made timely, the 

Audit staff considered $28,637 as excessive contributions from the staff member until the 

expenses were reimbursed. No further action will be taken since the staff member was 

eventually reimbursed for the expenses. 

E. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, URP stated that it strongly disagreed with 

this finding because it was not aware of the staff member's reimbursable expenses when 

they were incurred. URP further stated that it knew and could know of these expenses 

only after the staff member presented receipts and/or expense reports to the treasurer, 

which frequently occurred well after the underlying expenses were incurred. URP's 

regular practice was to issue reimbursements to the st^ member within a calendar week 

of this presentation. Given this practice, URP felt the Commission should not consider 

these expenses as contributions as of the date incurred. URP also agreed with the Audit 

staff that no further action should be taken in this matter since the staff member was 

eventually reimbursed for the expenses. 

Commission Conclusion 

On D^ember 1,2016, the Commission considered the Audit Division Reconunendation 

Memorandum in which the Audit staff recommended that the Commission find that URP 

accepted contributions from a staff member that exceeded the limits by $28,637 until the 

expenses were reimbursed by URP. 

The Commission approved the Audit staffs recommendation. 

Part V 

Additional Issue 

Recordkeeping for Employees | 

Summary 

As defiled in Finding 4 above, URP did not maintain any monthly payroll logs, as 

requir^, to document the percentage of time each employee spent in connection with a 

federal election. For 2011 and 2012, the Audit staff identified payments to URP 

employees totaling $285,242 for which URP did not maintain monthly payroll logs. This 

consisted of $269,776 for which payroll was allocated with federal and non-federal funds, 

and $15,466 for which payroll was exclusively paid with non-federal funds. URP stated 
27 

it did not maintain payroll logs during the 2012 election cycle but intends to maintain 

such payroll logs in the future. In response to the Interim Audit Report recommendation 

and the E)raft Final Audit Report, URP's counsel stated that URP has long since remedied 

the issue identified for this finding. URP compiled with the Interim Audit Report 

recommendation by implementing a plan to maintain monthly payroll logs in the future. 

The Commission did not approve, by the required four votes, the portion of the Audit 

stafTs recommended finding that failed to maintain monthly payroll logs for the 

$14,504 paid exclusively with non-federal funds during a given monA. Pursuant to 

Commission Directive 70,'^ these expenses are discussed in the "Additional Issue" 

section, and the payroll expenditures of $14,504 are not included in Finding 4. 

Legal Standard 

The legal standard in Finding 4 is incorporated herein. 

Facts and Analjrsis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbur^ments for payroll. URP did not 

maintain any monthly payroll logs or equivalent records to document the percentage of 

time each employee spent in connection with a federal election. These logs are required 

to document the proper allocation of federal and non-federal funds used to pay employee 

salaries and wages. For 2011 and 2012, URP did not maintain monthly logs for 

$285,242'^ in payroll. This amount includes payroll paid as follows to URP employees. 

1. Employees reported on Schedule H4 (Disbursements for Allocated 

Federal/Non-Federal Activity) and paid with federal and non-federal funds 

during the same month (totaling $269,776); 

2. Employees reported on Schedule H4 and also paid with 100 percent nonfederal funds during the same month (totaling $962); and 

3. Employees paid exclusively with non-federal funds in a given month (totaling 

$14,504). 

B. Interim Audit Report & Audit Division Reeommendation 

The Audit staff discussed the recordkeeping requirement with URP representatives 

during the exit conference. URP representatives stated they believed ihe payroll was 

allocated correctly. URP has not located any payroll logs and noted that the plan moving 

forward is to keep payroll logs. 

In response to the exit conference, URP representatives stated that the "[pjarty undertook 

efforts to ensure that staff time and other expenses were properly allocated between its 

federal and non-federal accounts. The Party did not however, maintain monthly payroll 

logs during the 2012 election cycle." URP representatives further stated they intend to 

maintain such payroll logs in the future. 

Available at http://www.iec.gov/diretives/directive_70.pdr 

" See footnote 4. 
28 

URP submitted an affidavit from the executive director during the 2011-2012 audit cycle 

stating that identified employees did not spend more than 25 percent of their 

compensated work time on activities in connection with the federal election. The 

affidavit further stated that the executive director also did not spend more than 25 percent 

of his time on activities in connection with a federal election. 

The affidavit provided by URP did not resolve the recordkeeping finding because it did 

not document the time an employee spent in connection with a federal election. 

The Interim Audit Report recommended that URP provide evidence that it maintained 

monthly time logs to document the percentage of time an employee spent in connection 

with a federal election; or implement a plan to maintain monthly payroll logs in the 

future. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, URP's counsel stated that URP 

has long since remedied the issue identified for this finding. Again, in response to the 

exit conference, URP representatives stated they did not maintain monthly payroll logs 

but intend to maintain monthly payroll logs in Ae future. As such, URP complied with 

the Interim Audit Report recommendation by implementing a plan to maintain monthly 

payroll logs. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged that URP did not maintain monthly payroll 

logs during the audit cycle totaling $285,242, but intends to maintain monthly payroll 

logs in the future. 

E. Committee Response to the Draft Final Audit Report 

In response to the Draft Final Audit Report, URP stated the issue identified in the finding 

was remedied. 

Commission Conciusion 

On December 1,2016, the Commission considered the Audit Division Recormnendation 

Memorandum in which the Audit staff recommended that the Commission find that URP 

failed to maintain monthly payroll logs totaling $285,242, as required, to document the 

percentage of time each employee spent in connection with a federal election. 

The Commission did not approve, by the required four votes, the portion of the Audit 

staffs recommended finding that URP failed to maintain monthly payroll logs for the 

$14,504 in payroll paid exclusively from a non-federal account during certain months. 

Some Commissioners voted to approve the Audit staffs recommendation. Others did 

not, citing the position of three Conunissioners in the Final Audit Report of the 

Commission on the Georgia Federal Elections Committee, in support of the proposition 

that the Commission lacks jurisdiction to impose recordkeeping and documentation , 

requirements on exclusively non-federal activity. 
29 

These expenses are discussed in the "Additional Issue" section pursuant to Commission 

Directive 70.'^ 

Available at http://www.fec.gov/directives/diFective_70.pdf.