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RL87/ll2487

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MEMORANDUM

FEDERAL ELECTION COMMISSION

WASHINGTON, 0 C 20-4&3

A87-ll

November 24, 1987

TO:

FROM:

SUBJECT:

FRED EILAND

CHIEF, PRESS OFFICE~

ROBERT J. COSTA

ASSISTANT STAFF DI RE TOR

AUDIT DIVISION

PUBLIC ISSUANCE OF FINAL AUDIT REPORT - MCMILLAN FOR CONGRESS COMMITTEE

Attached please find a copy of the final audit report of the

McMillan for Congress Committee which was approved by the

Commission on November 13, 1987.

Informational copies of the report have been received by all

parties involved and the report may be released to the pUblic.

o Attachment as stated

I'.

C cc: FEC Library

RAn

a" /Public Disclosure

Office of General Counsel

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• FEDERAL ELECTION COMMISSION

WASHINGTON 0 C 204b3

A87-11

REPORT OF THE AUDIT DIVISION

ON

MCMILLAN FOR CONGRESS COMMITTEE

RL87/110987

'.f)

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I. Background

A. Overview

This report is based on an audit of the M~1i11an for

Congress Committee ("the Committee"), undertaken by the Audit

Division of the Federal Election Commission in accordance with

the provisions of the Federal Election Campaign Act of 1971, as

amended ("the Act"). The audit was conducted pursuant to Section

438(b) of Title 2 of the United States Code which states, in

part, that the Commission may conduct audits and field

investigations of any political committee ~equired to file a

report under Section 434 of this title. Prior to conducting any

audit under this Section the Commission shall perform an internal

review of reports filed by selected committees to determine if

the reports filed by a particular committee meet the threshold

requirements for substantial compliance with the Act.

The Committee registered with the Clerk of the House of

Representatives on June 14, 1985. The Committee maintains its

headquarters in Charlotte, North Carolina.

The audit covered the period January 1, 1985 through December 31, 1986. The Committee reported a cash balance on

January 1, 1985 of $-0-: total receipts of $760,563.16: total

disbursements of $741,463.60: and a cash balance on December 31,

1986 of $19,099.56.

This audit report is based on documents and workpapers which support each of its factual statements. They form part of

the record upon which the Commission based its decisions on the

matters in the report and were avaiJable to the Commissioners and

appropriate staff for review.

B. Key Personnel

The Treasurer of the Committee during the period covered by the audit was Mr. George Rohe •

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C. Scope

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The audit included such tests as verification of total

reported receipts and expenditures and individual transactionsJ

review of required supporting documentationJ analysis of

Committee debts and obligationsJ and such other audit procedures

as deemed necessary under the circumstances.

II. Finding and Recommendation

A. Misstatement of Financial Activity

Sections 434(b) (2) and (4) of Title 2 of the United

States Code state, in part, that each report shall disclose the

total amount of all receipts and the total amount of all

disbursements for the reporting period and the calendar year.

The auditors' reconciliation of 1985 reported activity

to adjusted bank activity revealed that receipts were

underreported by a net amount of $7,154.08 and expenditures underreported by a net amount of $7,102.04.

The misstatements resulted from (a) underreporting of

receipts ($8,404.21), (b) overreporting of itemized receipts ($1,250.00), (c) including expenditures on Schedules B but not

in Summary page total ($7,390.41), (d) not reporting in-kind

contributions as expenditures ($2,661.63) and (e) overreporting of expenditures ($2,950.00).

The Treasurer of the Committee was provided with

schedules detailing the discrepancies.

The Audit staff recommended that within 30 days of

receipt of the interim report the Committee file comprehensive

amendments to correct the financial misstatement as noted above.

On November 2, 1987, the Committee filed comprehensive amendments which substantially corrected the financial

discrepancies.

Recommendation

The Audit staff recommends that no further action be taken •

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