Draft Final Audit Report of the 

Audit Division on the 

TeaPartyE^press.org 

(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 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 hot to have 

the threshold 

requirements for . 

substantial compliance 

with the Act,' 

determii 

comnu^ compli 

the lii^^pns, 

prohibiti^^ynd 

disclosure r^ nt! 

of the Act. 

Future Action 

The Commission m^ 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Committee^ 

TeaPartyExpress.org is an ] 

political action committee] 

For more information. 

Organization, p. 2. 

qualified, non-party 

in Willows, Cdifomia. 

the Committee 

V. 

ividuals 

ions Made 

Financia 

• Receipts 

o Contributii 

o Refunds of Conl 

^^^eral Candidal 

o 

T .s . 

w 

g Expenditures 

itions to Federal 

her Committees 

It Expenditures' 

v^uriu-iuiition Refunds 

Other Disbursements 

Disbursements 

$ 10,135,860 

$2,500 

32,666 

$ 10,171,026 

$ 8,320,177 

259,500 

680,735 

19,685 

77,827 

$ 9,357,924 

Findings and Recommendations (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

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

• Reporting of Apparent Independent Expenditures (Finding 3) 

• Recordkeeping for Communications (Finding 4) 

• Failure to Itemize Debts and Obligations (Finding 5) 

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

Audit Division on the 

TeaPartyBxpress.org 

(January 1, 2011 - December 31, 2012) 

IK 
Table of Contents 

. x 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity A 2 

Part III. Summaries 

Findings and Recommendations ^ 3 

Part IV. Findings and Recommed^.ii ^ 

Finding 1. Misstatement of Financial Activity S 

Finding 2. Disclosure of Occupatifen/NMne of En ^ 7 

Finding 3. Reporting, of Apparent j^^endent Expendim ^ 9 

' Finding 4/ Recordkeeping for Conu^uu^f' 13 

Finding S. Failure to Iteinize Debt an^blig 1S 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the TeaPartyExpress.org^ (TPE), 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 committe^|^ is required to file a 

report under 52 U.S.C. §30104. Prior to conducting any audit^raermis subsection, the 

Commission must perform an internal review of reports filM^^elected committees to 

determine if the reports filed by a particular committee m^^tne' 

for substantial compliance with the Act. 52 U.S.C. S 1^^)-

old requirements 

Scope of Audit 

Following Commission-approved procedures^ 

factors and as a result, this audit examined: 

1. the consistency between reported figures and 

2. the disclosure of individual contri 

3. the disclosure of independent ex 

4.. the disclosure of debts and obligati 

independent expenditures; 

5. the completeness ofgeg^s; and 

6. other committe essary to 

' occupation 

uated var^^nsk 

e of employer; 

^t and apparent 

review." 

The committee's name during the audit period was Our Country Deserves Better TeaPartyExpress.Org 

and was subsequently changed on May IS, 20IS. 
Part 11 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration August 18,2008 

• Audit Coverage January 1,2011 - jSjg^ber 31,2012 

Headquarters Willows, Califqi^a 

Bank information 

• Bank Depositories Three 

• Bank Accounts Three^tig^ipg; One^ 

Treasurer 

• Treasurer When Audit Was Conducted Jgpy Lawl^r 

• Treasurer During Period Covered by Audit ^ lBl^resle\^/l/2011-4, r) 

KeW W8/2011 - Preset) 

Management Information 

• Attended Commission Campaign Financ" 

Seminar 

No 

Who Handled Accounting and Recordkeei 

Tasks 

Overview of Fi: 

jWudited 

ncial Activity 

Cash-on-hand 1 '• S20,252 

Receipts 

o Contrijbntions from Ii t«Js 10,135,860 

o . RefiiiidiwEpntribui ' to F 

Candidate^^her Committees^ ^ 2,500 

o Other Receip^f^ ^ 32,666 

Total Receipts ^ S10,171,026 

Disbursements 

o Operating Expenditure^ 8,320,177 

o Contributions to FedefSl Candidates/Other 

Committees 259,500 

o Independent Expenditures 680,735' 

o Contribution Refunds 19,685 

o Other Disbursements 77,827 

Total Disbursements S9357,924 

Cash-on-hand ® December 31,2012 $833,354 

^ This amount, as well as the amount for operating expenditures and other disbursements, may change as a result of 

the Commission's final consideration of the audit Finding 3. (See p. 9.) 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

A comparison of TPE's reported figures with its bank records indicated that in 2011, 

receipts and ending cash-on-hand were understated by $133.667 $127.193. 

respectively. In 2012, beginning cash-on-hand was undersi 

were overstated by $129,547, disbursements were underst^ 

cash-on-hand was overstated by $65,710. Subsequent 

its disclosure reports and partially corrected certain mi; mem 

TPE did not submit a response to the Interim A 

this matter unresolved. (For more detail, see 

7,193, receipts 

14, and ending 

tion, TPE amended 

;Repoit TheAud aiders 

Finding 2. Disclosure of Occupat of Employer 

A review of all contributions from infeiduals requiring^%iMtion indicated that 2,896 

contributions totaling $549,694 lackec^^^ire of occup^^i^name of employer. 

During the audit, TPE demonstrated btain, i^min and submit the 

missing occupation/name of employer in^mai aerially correct the disclosure 

errors. Since TPE's corr^^^ction occu%|^ i^^ratirication, the matter was 

included in the Intei '^H^^nort. 

TPE did not submit 

considers tl 

Interim AWu Report, however, the Audit staff 

Cseep. 7.) 

Fin Ki'portinK iil Apparent Independent 

Ex] 

During auE^eldwbrk 

$680,735 thimEdiscloi 

However, the staff i 

3,212) which aj 

udit staff reviewed independent expenditures totaling 

in Schedule E (Itemized Independent Expenditures), 

itified additional expenditures totaling $848,522 (845,310 + 

media-related independent expenditures that TPE disclosed 

on Line 21b (Opera Kpenditures) and Line 29 (Other Disbursements). 

Of the $680,735 independent expenditures reported on Schedule E, TPE did not file 

24/48-hour reports for seven expenditures totaling $28,003. Additionally, of the 

$848,522 disclosed as operating expenditures and other disbursements which appeared to 

be independent expenditures, TPE did not file any 24/48-hour reports. 

TPE did not submit a response to the Interim Audit Report. Absent evidence that the 

expenditures in question did not require reporting as independent expenditures and did 

not require 24/48-hour reports, the Audit staff considers these expenditures to be 

independent expenditures. (For more detail, see p. 9.) 
Finding 4. Recordkeeping for Communications 

During audit fieldwork, the Audit staff reviev^ed disbursements to verify the accuracy of 

the information and proper classification of transactions disclosed on reports. TPE 

reported 340 (237+103).expenditures totaling $3,792,648 (2,302,864 + 1,489,784), on 

Schedule B, Line 21b (Operating Expenditures) or Line 29 (Other Disbursements) with 

purposes such as "Postage & Delivery", "Printing & Mailshop" or "PAC Fundraising 

Postage & Delivery." Documentation provided by TPE was insufficient to make a 

determination pertaining to the purpose for these disbursements and verification as an 

operating or other expense. 

TPE did not submit a response to the Interim Audit Report, 

documentation as recommended, the Audit staff considi 

be insufficient. (For more detail, see p. 13.) 

the further 

entation provided to 

Finding 5. Failure to Itemize D 

During audit fieldwork and in the course of 

independent expenditures, the Audit staff noted 

and obligations pertaining to these expenditures toi 

TPE did not submit a response to thelT 

reports to include the debts owed, the / 

more detail, see p. IS.) 

and Oblig.ii 

ndent and apj 

1 to properly 

561. 

lose debts 

lit Rei 

siders i 

it the filing of amended 

T unresolved. (For 
Part IV 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

Summary 

A comparison of TPE's reported figures with its bank records indicated that in 2011, 

receipts and ending cash-on-hand were understated by $133,667 and $127,193, 

respectively. In 2012, beginning cash-on-hand was understated^^^7,193, receipts 

were overstated by $129,547, disbursements were understate^p$S^44, and ending 

cash-on-hand was overstated by $65,710. Subsequent to au^^^tification, TPE amended 

its disclosure reports and partially corrected certain mis 

TPE did not submit a response to the Interim Audi 

this matter unresolved. 

4 

Legal Standard 

Contents of Reports. Each report must disclose: 

onsiders 

• the amount of cash-on-hand a1 

• the total amount of receipts for' 

• the total amount of disbursement 

year; and 

• certain transactipi require i 

Schedule B T 

(5). ^ 

Facts anil An-ilysi-. 

Jieginning f the reporting period;" 

ng perio( _ fefos^the calendar year; 

ig p^^wd for the calendar 

on on S^^ule A (Itemized Receipts) or 

ursements^ 52 U.S.C §30104(b)(l), (2), (3), (4), and 

A. Fa_ 

lit fieldw 

its bank'f^rds for calenS 

TPE misist^^mceipts anc 

and ending c^^alance foj 

between TPE's ( 

explain why the dis 

tudiFl^pF^econciled TPE's reported financial activity with 

11 and 2012. The reconciliation determined that 

ding cash-on-hand for 2011, and receipts, disbursements 

012. The following charts outline the discrepancies 

irts and its bank records. The succeeding paragraphs 

icies occurred. 

2011 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2011 

$21,661 $20,252 $1,409 

Overstated 

Receipts • $3,668,329 $3,801,996 $133,667 

Understated 

Disbursements $3,617,405 $3,622,469 $5,064 

Understated 

Ending Cash Balance $72,585 $199,779 $127,194 
@ December 31,2011 Understated 

The beginning cash balance was overstated by $1,409 and is unexplained, but likely 

resulted from prior-period discrepancies. 

The imderstatement of receipts resulted from the following: 

• Unitemized contributions froiii individuals, not reported 

on TPE's 2011 Mid-Year report + $103,315 

• Returned contributions not reported as negative receipts - 1,015 

• . Unexplained differences + 31.367 

Net Understatement of Receipts SI33.667 

The $127,193 understatement of the ending cash balance i 

described above. 

from the misstatements 

2012 Committee Activity 

Beginning Cash Balance @ 

January 1,2012 

Receipts 

Disbursements 

Ending Cash Balance 

@ December 31,2012 

The overstatement^ Tollowing: 

• Contributii^s ^6 bank 

• Credit card co r previously 

rej 

tiverstatei^iii Ri 

$129,547 

Overstated 

$5,244 

Understated 

$65,710 

Overstated 

$125,487 

8129,547 

$350,475 

341,136 

The u ment o iulted from the following: 

• Di sements cle^^g bank, not reported + 

• Repon^^jabursei^ts not traced to bank 

• Credit c^^snbi^ion chargebacks reported as 

disbursemei^^F - 4,060 

• UnexplainedjOifferences i 35 

Net Understatement of Disbursements + S5.244 

The majority of disbursements TPE failed to report cleared the bank in November 2012 

and should have been disclosed on TPE's 2012 Post-General report. During the same 

period, TPE reported a single transaction of $334,091 which did not clear the bank. 

Based on the available information, the Audit staff was unable to determine whether the 

reporting of the single transaction of $334,091 was in relation to those disbursements 

identified as not reported on the 2012 Post-General report. 
The net overstatement of the ending cash balance resulted from the misstatements 

described above, as well as from a $58,112 mathematical discrepancy in calculating the 

ending cash balance. 

Subsequent to audit notification, TPE filed amended 2012 reports in April 2014. The 

Audit staff analyzed the amended information and determined that the amendments 

corrected some but not all of the identified misstatements. 

B. Interim Audit Report and Audit Division Recommendation 

The Audit staff discussed the misstatements for 2011 and 2012 witfi TPE's representative 

during the exit conference and provided copies of relevant workj!^^ detailing the 

remaining misstatements. TPE provided no comments relat his matter in its 

response to the exit conference. ^ 

The Interim Audit Report recommended that TPE 

to disclose the additional Unitemized Contributioj 

on Line 11 (a)(ii). The Interim Audit Report 

disclosure report be amended to show the adj 

explanation that it resulted from audit adjustment 

aend M Mid-Year Report 

dividuals^ming $103,315 

lended that ^^^tjecent 

balance wi^^ 

iriod. ^ 

C. Committee Response to Interii 

TPE did not submit a response to the If 

reports filed. The Audit staff considers i 

^It Report 

it Repor. 

IS iolvet 

e amended disclosure 

Finding 2. Disclgg^rt: of Occ^»tion/„W;ime of Employer 

Summary 

A review of all contribi 

contributioris^|^j^mg.$54 

During 

missin^ccupation/i 

errore^^iie TPE's co: 

included!^ nterimA 

TPE did not sul 

considers this ma 

[uiring itemization indicated that 2,896 

of occupation/name of employer, 

irts" to obtain, maintain and submit the 

lation to materially correct the disclosure 

occurred after audit notification, the matter was 

ise to the Interim Audit Report, however, the Audit staff 

Legal Standard 

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

contribution from an individual, the conunittee must provide the following 

information: 

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

• the contributor's occupation and the name of his or her employer; 

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

• the amount of the contribution; and 
8 

• the calendar year-to-date total of all contributions from the same individual. 52 

U.S.C. §30104(b)(3)(A) and 11 CFR §§ 100.12 and 104.3(a)(4)(i). 

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

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

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

considered in compliance with the Act. 52 U.S.C. §30102(i) and 11 CFR §104.7(a). 

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 foUowing criteria. 

• All written solicitations for contributions included: 

o a clear request for the contributor's full nan ng ^dress, occupation, 

and name of employer; and 

the statement that such reporting is requirl^by FS^ aw. 

Note: The request and statement mu|^^pe& in a cle gd conspicuous 

manner on any response material in^ded in a solicitatic 

o 

o 

Within 30 days of receipt of the com ion, the 

effort to obtain the missing informal 

documented oral request. 

The treasurer reported any conMbutor info: 

provided by the contributor.^^btained in a f( 

contained in the committee's rior 

during the same two-year electi 

;rj 

mad^ 

ritten request J 

one 

Facts and Aii.ii>sis 

A. Facts 

A review of all itemi: 

totaling %5^M>M^S.25 

be item 

entriesMith missing 

Effo' 

^that, although not initially 

j^up communication or was 

at the committee filed 

§l#r-7(b). 

im incpiduals indicated that 2,896 contributions 

alue of individual contributions required to 

ed d wure of occupation/name of employer, the contributor 

ii ^^^ither disclosed with the notation "n/a"; "Best 

mk ^^e Schedules A (Itemized Receipts). 

During ai ^^work, th idit staff reviewed the receipt documents provided by TPE 

to determine if^S^had u :d "best efforts" to obtain, maintain and submit the missing 

information. TPE^^eg^d 391 follow-up letters sent to contributors requesting the 

occupation/name of^ployer. In response to these letters, TPE provided the necessary 

occupation/name of employer information obtained from 137 individuals. For the 

remaining 254 individuals, no further occupation/name of employer information was 

provided. The Audit staff reviewed TPE's disclosure reports filed after the audit 

notification and determined that TPE amended its reports to materially disclose the 

missing occupation/name of employer information. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to the TPE representative at the exit conference and 

noted that TPE has materially resolved this matter and no further action was required. 
However, because TPE's corrective action was taken after the audit notification, the 

matter was presented in the Interim Audit Report. 

The Interim Audit Report recommended that TPE provide any comments it deemed 

necessary with respect to this matter. 

C. Committee Response to Interim Audit Report 

TPE did not submit a response the Interim Audit Report, however, the Audit staff 

considers this matter resolved. 

Finding 3. Reporting of Apparent Indepeiij|^l4t 

E2xpenditures 

Summary 

During audit fieldwork, the Audit staff reviewed i 

$680,735 that TPE disclosed on Schedule E (Ii 

However, the Audit staff identified additional 

3,212) which appeared to be media-related inde 

on Line 21b (Operating Expenditures) and Line 29 

le Interim 

uire repo: 

Of the $680,735 independent expendi' 

24/48-hour reports for seven expendr 

$848,522 disclosed as operating expendi 

be independent expendi i 'E did not 

TPE did not submi 

expenditures in q 

not require 24/48 

independc 

LcMjgitondard 

A. Bg^ion of Indi pi m 

expenditi^^^e for a co 

clearly idenfn^^candidai 

or at Ae requei 

it expenoi^es totaling 

Independent Ex^^bn^. 

italing $848,^^845,310 + 

fidjtures that T^ disclosed 

sbursements). 

TPE did not file 

onally, of the 

lents which appeared to 

reports. 

their agents, or a ] 

l^dit Report. Absent evidence that the 

independent expenditures and did 

isiders these expenditures to be 

tl tpiuditures. An independent expenditure is an. 

ui 3n expressly advocating the election or defeat of a 

is not made in cooperation, consultation, or concert with, 

of, a candidate, a candidate's authorized committee, or 

party or its agents. 

A clearly identified ^didate is one whose name, nickname, photograph or drawing 

appears, or whose identity is apparent through unambiguous reference, such as "your 

Congressman," or through an unambiguous reference to his or her status as a candidate, 

such as "the Democratic presidential nominee" or "Republican candidate for Senate in 

this state." 

Expressly advocating means any communication that: 

• Uses phrases such as "vote for the President" or "re-elect your Congressman" or 

communications of campaign slogan(s) or individual word(s), which in context 
10 

can have no other reasonable meaning than to urge election or defeat of one or 

more clearly identified candidates; or 

• When taken as a whole and with limited references to external events, such as 

proximity to the election, could be interpreted by a reasonable person only as 

advocating the election or defeat of one or more clearly identified candidates. 11 

CFR §§100.16(a), 100.17 and 100.22. 

B. Disclosure Requirements - General Guidelines. An independent expenditure shall 

be reported on Schedule E if, when added to other independent expenditures made to 

the same payee during the same calendar year, it exceeds $2^^ndependent 

expenditures made (i.e., publicly disseminated) prior to pa^^^ould be disclosed 

as memo entries on Schedule E and as a debt on Schedid^r.. Independent 

expenditures of $200 or less need not be iteniized, th^ph^^gmmittee must report 

the total of those expenditures on line (b) on Schej^l^. 11 04.3(b)(3)(vii), 

104.4(a) and 104.11. 

C. Last-Minute Independent Expenditure^Ei^^rts (24^our Report.- • ^ 

independent expenditures aggregating $ 1,00d^ ^h^respect to a^ given 

election, and made after the 20*'' day but more th lours before the day of an 

election must be reported and the^^rt must be g|g by the Commission within 

24 hours after the expenditure is m^^A 24-hour rep^lb required for each 

additional $1,000 that aggregates. report m^^^filed on a Schedule E. 

The date that a communication is pu^lyems as the date that the 

Committee must us( mine whe%^^ t( nt of independent 

expenditures has, in egate, reacmu or exceeJId the threshold reporting 

amount of $1,1 "" CFF® 104.4(f) an%04.5(g)(2). 

D. Iiiiii 

expenc sgat 

tim^hnngai 

disii^se this activi^ 

I or more, 

after t!^ enditure i! 

^8-H^r Reports). Any independent 

),ODtl^^^^^ith respect to any given election, at any 

im to and including the 20th day before an election, must 

i^T each time that the expenditures aggregate 

irts )e filed with the Conunission within 48 hours 

ie. fl CFR §§104.4(f) and 104.5(g)(1). 

E. Formal Ki •iii8jement> garding Reports and Statements. Each political 

committee shaf^^^f^n records with respect to the matters required to be reported 

which shall prov^in sufficient detail the necessary information and data from which 

the filed reports may be verified, explained, clarified, and checked for accuracy and 

completeness. CFR § 104.14(b)( 1). 

Facts and Analysis 

A. Reporting of Apparent Independent Expenditures 

1. Facts 

During audit fieldwork, the Audit staff reviewed disbursements to ensure the 

reporting completeness and accuracy of independent expenditures that TPE disclosed 
11 

on Schedule E. The Audit staff noted that TPE correctly disclosed independent 

expenditures totaling $680,735 on Schedule E, however, made additional mediarelated expenditures totaling $848,522 and disclosed them as operating expenditures 

or other disburaements that may be considered independent expenditures. A 

breakdown of the analysis for ^ese expenditures is as follows: 

a) Independent Expenditures Reported as Operating Expenditures and 

Other Disbursements (Associated Invoice Provided) 

TPE made 235 apparent independent expenditures totaling $845,310 for 

which it provided supporting documentation such as invoices, scripts, ads, 

solicitation letters,, etc. 

i) For apparent independent expenditures to^^g $82^,427, the 

conmiunication contained language exj 

or defeat of clearly identified candidat 

amount mostly consists of costs i 

each containing express advc 

ii) For apparent independent e^^ditures^ 

communication could onlj 

of election or defeat of one cle 

100.22(b). 

b) Independent Expendi 

Other Disbursements (i^ Ii 

TPE made flfteen apparent 

as operatk^^^nditures or 

lents 

Sns: 

ivocating the election 

11 100.22(a). This 

. with^ draising letters 

staling $15,8^ 

I containing I ocacy 

^-candidate. CFR§ 

Expenditures and 

consid^ 

the^f@^« 

i) Con^ 

A 

t-'-coi 

dil^ 

y tele^ 

y advoci 

anew 

srted a^ < ip' 

ssociat 

t which were reported 

' disbui^fients. The Audit staff 

: apparent independent expenditures for 

ilOO. 

JiVithout In^ce -TPE provided eight 

jwever, the Audit staff was not able to 

^scripts i^th any invoices or with a particular 

fore, the amount spent for these eight . 

r scripts is unknown. These scripts contain express 

»e by calling for the "defeat of Barack Obama", "elect 

ident", or "put Romney and Paul in White House." 11 CFR 

5n Invoice- There were seven independent expenditure emails 

, $3,212 that were supported by an invoice, however, the 

I could not be traced to the disWsement database or bank.^ 

Five of these independent expenditure emails totaling $2,288 

contained express advocacy language calling for the "defeat of Dick 

Lugar." 11 CFR § 100.22(a). Two independent expenditure emails 

totaling $924 could only be inteipreted as containing the advocacy of 

election or defeat of one clearly identified candidate. 11 CFR§ 100.22 

(b). 

Discrepancies between actual and reported disbursements are discussed in Finding 1. (See p.S.) 
12 

2. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff presented the schedule of disclosure errors for 

apparent independent expenditures. The TPE representative had no immediate 

comments, however, in response to the exit conference, provided additional e-mail 

communications and invoices which the Audit staff reviewed and incorporated into 

this finding. 

The Interim Audit Report recommended that TPE provide: . 

• Documentation and evidence that apparent independent expenditures noted 

above did not require reporting as independent exj 

have included invoices with the corresponding coi 

applicablej TPE's payment information. . 

Absent such evidence, TPE should have ameni 

disbursements as independent expenditures o: 

submitted revised procedures for reporti 

3. Committee Response to Interim Auc^^enort 

TPE did not submit a response to the Intelrii^^dit 

disclosure reports filed. Absent compliance wi 

Audit staff considers these expen^tures to be ind& 

B. Failure to File 24/48 Reports foi 1 n-h nt ExpenS 

Evidence should 

itions and, where 

orts to disclose these 

and should have 

iitures. 

nor were i ded 

lendation a^ove, the 

t expenditures. 

1. Facts 

The Audit staff rev 

independent ex; 

24/48-hour i 

8-hour 

d above, 

^ ^ The foil 

i iiniipeii-liii 

TPElMjito fi 

totaling 

fcJfPE publi 

^ rting pel^d. 

filed , as well as the apparent 

ine whether additional reporting of a 

was noted: 

brted on Schedule E (Indepeiident 

reports totaling $15,539 and 48-hour reports 

of these communications, records indicate that 

ited the communication within the 24/48-hour 

b) \ I •! -^ni^deDendent Expenditures Reported as Operating 

ExpeP^res and Other Disbursements 

For a^arent independent expenditures totaling $848,522 (845,310 + 

3,212) noted above, TPE did not file 24 or 48-hour reports. No 

documentation or information was available pertaining to the date of 

public dissemination for these communications; therefore, the Audit .staff 

was not able to determine whether or not such reports were required to be 

filed. 

' The date the expenditure is publicly distributed serves as the date that the independent expenditure is 

made ibr purposes of the additional 24/48-hour report filing requirement. In the absence of a known'date 

for public dissemination, the Audit staff used the invoice date or date of incurrence to determine if a 

24/48-hour report was required. 
13 

2. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff provided the TPE representative with a 

schedule of undisclosed 24/48-hour reports. The TPE representative did not provide 

any comments at that time. 

The Interim Audit Report recommended that TPE provide do^mentation to support 

that the 24/48-hour reports, totaling $845,310, were timely that the reports 

were not required. Such documentation should have indi^^ support for the dates of 

public dissemination to determine whether a filing o ir report was 

required. 

3. Committee Response to Interim Audit 

TPE did not submit a response to the Interi 

expenditures in question did not require 

did not require 24/48-hour reports, the Audit si 

as requiring 24/48- hour reports. ^ 

Finding 4. Recordkeepinft for 

Summary 

During audit fieldworl 

the information 

reported 340 (23 

Schedule B, Line 21b ( 

purposes s age 

Postag^ 

detern^^tion pertaini: 

operati^ :her expei 

TPE did 1 

documentation 

be insufficient. 

Absent 

dent expenl 

these ex 

ns 

that the 

and 

itures above 

staff revi6^d disbursShients to verify the accuracy of 

cation of t^sactions disclosed on reports. TPE 

totaling %^2,648 (2,302,864 + 1,489,784), on 

T Line 29 (Other Disbursements) with 

ig & Mailshop" or "PAG Fundraising 

ion provided by TPE was insufficient to make a 

!br these disbursements and verification as an 

to the Interim Audit Report. Absent the further 

:d, the Audit staff considers the documentation provided to 

Legal Standard 

A. Formal Requirements Regarding Reports and Statements, Each political 

committee shall maintain records with respect to the matters required to be reported 

which shall provide in sufficient detail the necessary information and data from which 

the filed reports may be verified, explained, clarified, and checked for accuracy and 

completeness. 11 CFR §104.14(b)(l). 

B. Preserving Records and Copies of Reports. The treasurer of a political committee 

must preserve all records and copies of reports for 3 years after the report is filed. 52 

U.S.C. §30102(d). 
14 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbursements to verify the accuracy of 

the information and proper classification of transactions disclosed on reports. TPE made 

340 expenditures totaling $3,792,648 for which documentation was insufficient to make a 

determination pertaining to whether these disbursements were correctly reported on 

Schedule B, Line 21b (Operating Expenditures) or Line 29 (Other DisWsements). 

The Audit staffs analysis of the documentation that was providg^^^luding the 

reconciled committee's database, invoices, and bank staten letermined the 

following; 

Disbursements - No Invoices or Copies of j^mriiunicati^ Pr-vided 

fS2J02J<i4> 

Disbursements totaling $2,302,864 

on the committee's database and/or d: 

as "Postage & Delivery", "Printing & Mail^ 

Delivery." The Audit staff requested copies 

direct mail piece for each of tm sements. 

information to associate the pa 

provided. 

t mail ver _. -: reflected 

ule B with p , .es such 

C Fundraisi^g Postage & 

voices and the associated 

hese invoices or other 

itions have not been 

Disbursemeni 

Communic 

Disbi 

.«lled c: 

imunication: 

T^ porting 

disl inents. 

associ 

not respoiii 

bt Alili I" X'sociate with Copies of 

id to direct mail vendors and were 

losed on Schedule B with purposes 

advertising" or "PAC flmdraising 

lents, TPE provided copies of invoices as well as 

did^^prwide information about the related mail 

thoutWficient details, the Audit staff is unable to verify 

ization of these amounts as operating expenditures or other 

ludit staff requested information that would allow an 

ese invoices and the communications, however, TPE has 

it request. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff presented a schedule of the disbursements for 

which further records were necessary to verify the accuracy of TPE's reporting. TPE 

representatives provided additional e-mail communications, invoices, and two ads which 

the Audit staff reviewed and incorporated into this finding. The Audit staff provided an 

updated schedule of disbursements for which further records were necessary to verify the 

accuracy of TPE's reporting and requested that TPE provide additional invoices and 

information that would associate each invoice to the corresponding communication. TPE 

representatives provided an additional e-mail stating that TPE would provide additional 

documents but has not done so to date. 
15 

The Interim Audit Report recommended that TPE provide, in sufficient detail, the 

necessary information from which the reported operating expenditures and other 

disbursements totaling $3,792,648 may be verified or explained. Such records were to 

include: 

1. Copies of invoices and identification of the associated communications, and 

2. If the communication has already been provided, information associating each 

communication with an invoice(s). 

C. Committee Response to Interim Audit Report. 

TPE did not submit a response to the Interim Audit Report. Ab^^e further 

documentation as recommended, the Audit staff considers t ;umentation provided to 

be insufficient. x 

Finding 5. Failure to Itemize Debt aad iObl igaj^ohs 

Summary 

During audit fieldwork and in the course of n 

independent expenditures, the Audit staff noted th. 

and obligations pertaining to these ei^enditures total 

TPE did not submit a response to the 

reports to include the debts owedj the A 

Legal Standard . 

A. Continuous Repo^iii-j lli i 

and nature of outsta^^ debts 

52 U.S.C. §30104(b)(g^ 

B. Itemi 

J 

lent and aj ft 

:o properly "Sisclose debts 

561. 

A the filing of amended 

:er unresolved.. 

dit Repo 

I s the 

ical committee must disclose the amount 

1 those debts are extinguished, 

id 104.11(a). 

1 f >i-ii.ations. 

• debt of $5 

^ ^j^ate incurred^'^^date 

r^ J schedulel^port. 

A d xpeeding $^ must be disclosed in the report that covers the date on 

irted once it has been outstanding 60 days from 

lie transaction); the committee reports it on the next 

which 1 surred. 11 CFR §104.11(b). 

Facts and 

A. Facts 

During audit fieldwork, and in course of the review of independent and apparent 

independent expenditures, the Audit staff noted that TPE failed to properly disclose debts 

and obligations owed to 19 vendors totaling $310,561.^ The amounts were outstanding 

for a range of between 34 to 207 days and were mostly for advertising, media, printing, 

and mailing services. The incorrect disclosure consists of vendors with debts not 

reported as well as vendors for which the reported debt amount was understated. 

' Each debt amount was counted once, even if it required disclosure over multiple reporting periods. 
16 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to the TPE representative at the exit conference and 

provided schedules detailing the debt amounts which were incorrectly reported during the 

audited period. The TPE represeritative offered no comments in response to the exit 

conference. 

The Interim Audit Report recommended that TPE provide documentation demonstrating 

that these expenditures did not require reporting or were properly reported on Schedules 

D. Absent such documentation, TPE should have amended its repprts to correct the 

disclosure of debts and obligations totaling $310,S61. ^ 

C. Committee Response to Interim Audit Report 

TPE did not submit a response to the Interim Audit Ri 

reports filed. Absent the filing of amended reports 

staff considers the matter unresolved. 

amended disclosure 

'ed, the Audit 

if