Final Audit Report of the 

Commission on the Democratic 

Executive Committee of Florida 

January 1, 2007 - December 31, 2008 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(tiie Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

witii tiie Act.* The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

About the Committee (p. 2) 

The Democratic Executive Committee of Florida is a state party 

committee headquartered in Tallahassee, Horida. For more 

information, see the chart on the Committee Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions firom Individuals 

o From Other Political Committees 

o From Affiliated/Other Party 

Committees 

o Transfers from Non-federal Account 

o All Other Receipts 

Total Receipts 

• Disbursements 

o Operating Expenditures 

o Federal Election Activity 

o Other Disbursements 

Total Disbursements 

$ 1,381,039 

379,860 

20,465,884 

2.037,583 

516,180 

$ 24,780,546 

$ 12,999,529 

11,409.932 

288,438 

$ 24,697,899 

Commission Findings (p. 3) 

• Excessive Coordinated Party Expenditures (Finding 1) 

• Failure to Itemize Coordinated Party Expenditures (Finding 2) 

• Allocation of Expenditures (Finding 3) 

• Misstatement of Financial Activity - Levin Fund (Finding 4) 

• Disclosure of Disbursements (Finding 5) 

Additional Issue (p. 5) 

• Allocation of Rent Paid for Conunittee Headquarters 

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

Commission on the Democratic 

Executive Committee of Florida 

January 1, 2007 - December 31, 2008 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Audit Hearing 1 

Part II. Overview of Committee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Siunmaries 

Commission Findings 3 

Additional Issue 5 

Part IV. Conmiission Findings 

Finding 1. Excessive Coordinated Party Expenditures 6 

Finding 2. Failure to Itemize Coordinated Party Expenditures 10 

Finding 3. Allocation of Expenditures 11 

Finding 4. Misstatement of Financial Activity - Levin Fund 17 

Findings. Disclosure of Disbursements 18 

Part V. Additional Issue 

Allocation of Rent Paid for Committee Headquarters 20 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Democratic Executive Committee of Florida 

(DECF), undertaken by tiie Audit Division of tiie Federal Election Commission (the 

Commission) in accordance with the Federal Election Campaign Act of 1971, as 

amended (the Act). The Audit Division conducted the audit pursuant to 2 U.S.C. 

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

political conunittee that is required to file a report under 2 U.S.C. §434. Prior to 

conducting any audit under tiiis subsection, the Commission must perform an intemal 

review of reports filed by selected committees to determine whether the reports filed by a 

particular committee meet the threshold requirements for substantial compliance with the 

Act. 2 U.S.C. §438(b). 

Scope of Audit 

Following Conunission-approved procedures, the Audit staff evaluated various risk 

factors and as a result, this audit examined: 

1. tiie receipt of excessive contributions and loans; 

2. the receipt of contributions from prohibited sources; 

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

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 committee operations necessary to the review. 

Audit Hearing 

DECF declined the opportunity for an audit hearing before tiie Conunission. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration April 19.1972 

• Audit Coverage January 1,2007 - December 31.2008 

Headquarters Tallahassee, Florida 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Six Federal and Two Non-federal 

Treasurer 

• Treasurer When Audit Was Conducted Alma Gonzalez 

• Treasurer During Period Covered by Audit Rudy Parker 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand @ January 1,2007 $ 203,156 

o Contributions from Individuals 1,381,039 

o From Other Political Committees 379.860 

o From Affiliated/Other Party Committees 20,465.884 

o Transfers from Non-federal Account 2.037.583 

o All Other Receipts 516,180 

Total Receipts $ 24,780,546 

o Operating Expenditures 12.999.529 

o Federal Election Activity 11.409.932 

o Other Disbursements 288.438 

Total Disbursements $ 24,697,899 

Cash-on-hand @ December 31,2008 $ 285,803 
Part III 

Summaries 

Commission Findings 

Finding 1. Excessive Coordinated Party Expenditures 

During fieldwork. the Audit staff calculated that DECF appeared to have exceeded the 

2008 coordinated party expenditures limit on behalf of a House candidate ($60,000) by 

$35,108. Our review identified two media ads ($82,400) and two direct mail pieces 

($12,708) tiiat appeared to represent coordinated party expenditures. 

In response to the Interim Audit Report reconunendation, DECF provided statements and 

documents to support its contention tiiat the expenditures should not be considered 

excessive coordinated party expenditures. DECF submitted documentation for the direct 

mail pieces to support its claim that sufficient volunteer activity occurred, and tiiat the 

expenses qualified for the volunteer materials exemption and were not coordinated party 

expenditures. In light of the lack of clarity in recent audits regarding the amount of 

volunteer involvement needed to qualify for tiie volunteer materials exemption, the Audit 

staff did not count the expenses toward the coordinated party expenditure limit. 

Regarding tiie two media ads ($82,400). however, DECF did not demonstrate that it was 

granted additional spending autiiority beyond $60,000. As a result. DECF exceeded its 

coordinated party expenditures limitation by $22,400 ($82,400 - $60,000). 

The Commission approved a finding tiiat DECF exceeded its coordinated party 

expenditure limitation by $22,400. In reaching its conclusion, tiie Commission noted 

that, based on the reports filed by the Democratic Congressional Candidate Committee 

(DCCC), the combined coordinated expenditure limit of $84,200 was not exceeded on 

behalf of the House candidate. (For more detail, see p. 6.) 

Finding 2. Failure to Itemize Coordinated Party 

Expenditures 

During fieldwork. the Audit staff identified 64 expenditures, totaling $207,665, which 

DECF did not itemize on Schedule F (Itemized Coordinated Party Expenditures). DECF 

made the expenditures on behalf of six congressional candidates. Subsequent to the start 

of audit fieldwork, DECF filed amended reports tiiat substantially disclosed the 

expenditures in question as coordinated party expenditures on Schedule F. 

In response to the Interim Audit Report recommendation. DECF made no additional 

comments on tiiis matter. DECF has corrected tiie public record witii respect to these 

transactions. 

The Commission approved a finding tiiat DECF failed to itemize coordinated party 

expenditures of $194,957. (For more detail, see p. 10.) 
Finding 3. Allocation of Expenditures 

During fieldwork, the Audit staff's review of disbursements made from the federal and 

non-federal accounts identified an apparent non-federal overfunding of allocable activity 

by $107,536. 

DECF materially complied with the Interim Audit Report recommendation. DECF either 

accepted tiie Audit staff's position or provided documentation demonstrating that all nonfederal expenditures in question required less allocation. DECF's response reduced the 

non-federal overfunding of allocable activity to $84,364. 

After considering tiiis finding, the Commission did not interpret the use of Creole 

translators as get-out-the-vote activity. Ratiier. tiie Commission agreed with DECF that it 

was an allocable expense to be paid on the administrative ratio. This further reduced the 

non-federal overfunding of allocable activity by $12,413. to $71,951. In addition, the 

Commission could not reach a consensus on whether DECF had properly allocated rent 

payments for its headquarters (the non-federal overfunding for rent was calculated as 

$28,482) between DECF and state caucus conunittees. Thus, tiie amount of non-federal 

overfunding of allocable activity on which the Commission could agree was $43,469 

($84,364 - $12,413 - $28,482). for which DECF transferred funds from its federal 

account to its non-federal account to correct tiie overfunding. 

The Commission approved a finding that DECF's non-federal accounts overfunded its 

share of allocable activity by $43,469. (For more detail, see p. 11.) 

Finding 4. Misstatement of Financial Activity - Levin 

Fund 

Throughout tiie audit period, DECF disclosed $6,438 as cash-on-hand for tiie Levin fund 

account. However, DECF's Levin fund account closed in November 2006. In response 

to the Interim Audit Report recommendation, DECF filed an amended report that 

corrected the overstatement of cash-on-hand. 

The Commission approved a finding tiiat DECF misstated its Levin fund financial 

activity for 2007 and 2008. (For more detail, see p. 17.) 

Finding 5. Disclosure of Disbursements 

During audit fieldwork. tiie Audit staff calculated that disbursement entries, totaling 

$9,554,713. contained inadequate or incorrect disclosure information. In response to the 

Interim Audit Report recommendation. DECF filed amended reports that materially 

corrected tiie disclosure errors. 

The Commission approved a finding tiiat DECF did not properly disclose disbursements 

of $9,554,713. (For more detail, see p. 18.) 
Additional Issue 

Allocation of Rent Paid for Committee Headquarters 

During audit fieldwork, the Audit staff reviewed disbursements made from the federal 

and non-federal accounts and identified a non-federal overfunding of $28,482 related to 

the overpayment of rent at DECF's headquarters. DECF disagreed witii the Audit staff 

and maintained that it had properly allocated the rent between federal and state offices. 

The Commission could not reach a consensus on whether DECF had properly allocated 

its rental payments between DECF and state caucus committees. The Commission did 

not approve tiie Audit staffs recommended finding by the required four votes. 

Pursuant to Commission Directive 70^. this matter is discussed in tiie "Additional Issue" 

section. (For more detail, see p. 20.) 

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

Commission Findings 

Finding 1. Excessive Coordinated Party Expenditures 

Summary 

During fieldwork. the Audit staff calculated that DECF appears to have exceeded the 

2008 coordinated party expenditures limit on behalf of a House candidate ($60,000) by 

$35,108. Our review identified two media ads ($82,400) and two direct mail pieces 

($12,708) that appeared to represent coordinated party expenditures. 

In response to the Interim Audit Report recommendation. DECF provided statements and 

documents to support its contention that the expenditures should not be considered 

excessive coordinated party expenditures. DECF submitted documentation for the direct 

mail pieces to support its claim that sufficient volunteer activity occurred, and that the 

expenses qualified for the volunteer materials exemption and were not coordinated party 

expenditures. In light of the lack of clarity in recent audits regarding the amount of 

volunteer involvement needed to qualify for the volunteer materials exemption, the Audit 

staff did not count the expenses toward the coordinated party expenditure limit. 

Regarding the two media ads ($82,400). however. DECF did not demonstrate that it was 

granted additional spending autiiority beyond $60,000. As a result, DECF exceeded its 

coordinated party expenditures limitation by $22,400 ($82,400 - $60,000). 

The Commission approved a finding that DECF exceeded its coordinated party 

expenditure limitation by $22,400. In reaching its conclusion, the Commission noted 

that, based on the reports filed by the Democratic Congressional Candidate Committee 

(DCCC), the combined coordinated expenditure limit of $84,200 was not exceeded on 

behalf of the House candidate. 

Legal Standard 

A. Coordinated Party Expenditures. National party committees and state party 

committees are permitted to purchase goods and services on behalf of candidates in the 

general election—over and above the contributions that are subject to contribution limits. 

Such purchases are termed "coordinated party expenditures." They are subject to the 

following rules: 

• The amount spent on "coordinated party expenditures" is limited by statutory 

formulas that are based on tiie Cost of Living Adjustment (COLA) and the votingage population. 

• Party committees are permitted to coordinate the spending with the candidate 

committees. 

• The parties may make these expenditures only in connection with the general 

election. 

• The party committees—not the candidates—are responsible for reporting tiiese 

expenditures. 
• If tiie party committee exceeds the limits on coordinated party expenditures, the 

excess amount is considered an in-kind contribution, subject to the contribution 

limits. 2 U.S.C. §441a(d) and 11 CFR §§109.30 and 109.32. 

B. Assignment of Coordinated Party Expenditure Limit A political party may 

assign its authority to make coordinated party expenditures to another political party 

committee. Such an assignment must be made in writing, state the amount of the 

authority assigned, and be received by the assignee before any coordinated party 

expenditure is made pursuant to the assignment. The political party committee that is 

assigned autiiority to make coordinated party expenditures must maintain the written 

assignment for at least tiiree years. 11 CFR §§104.14 and 109.33(a) and (c). 

C. Volunteer Activity. The payment by a state committee of a political party of the costs 

of campaign materials (such as pins, bumper stickers, handbills, brochures, posters, party 

tabloids or newsletters, and yard signs) used by such conunittee in connection with 

volunteer activities on behalf of any nominee(s) of such party is not a contribution, 

provided that the following conditions are met: 

1. Such payment is not for cost incurred in connection with any broadcasting, 

newspaper, magazine, bill board, direct mail, or similar type of general public 

conununication or political advertising. The term direct mail means any mailing(s) by a 

commercial vendor or any mailing(s) made from commercial lists. 

2. The portion of the cost of such materials allocable to Federal candidates must be paid 

from contributions subject to tiie limitations and prohibitions of the Act. 

3. Such payment is not made from contributions designated by the donor to be spent on 

behalf of a particular candidate for federal office. 

4. Such materials are distributed by volunteers and not by conunercial or for-profit 

operations. 

5. If made by a political committee such payments shall be reported by the political 

committee as a disbursement in accordance with 11 CFR §104.3 but need not be 

allocated to specific candidates in committee reports. 

6. The exemption is not applicable to campaign materials purchased by the national party 

committees. 11 CFR §100.87 (a), (b). (c). (d), (e) and (g) and 11 CFR §100.147 (a), (b). 

(c).(d), (e)and(g). 

Facts and Analysis 

A. Facts 

The coordinated expenditure limit for the 2008 election cycle for a U.S. House of 

Representatives candidate in the state of Florida was $42,100. DECF provided 

documentation from the DCCC showing that it authorized DECF to spend $17,900 of its 

limit on behalf of Annette Taddeo. a candidate for the U.S. House of Representatives. 

Therefore, DECF's coordinated spending limit for this candidate was $60,000. 

The Audit staff identified four disbursements, totaling $95,108, on behalf of Annette 

Taddeo. Two disbursements ($82,400) were for media ads. The remaining two 
disbursements ($12,708) were for direct mail pieces. DECF disclosed the cost of one ad 

and both mail pieces as federal election activity on Line 30b of its disclosure reports. 

The cost of the remaining ad was disclosed as an operating expenditure on Line 21b. 

One of the two ads discussed the candidate's position on health care. The other ad 

discussed tiie opponent's voting record on health care and taxes. The disclaimer for each 

ad stated, "Paid for by the Florida Democratic Party and Taddeo for Congress, Approved 

by Annette Taddeo." 

Regarding the direct mail pieces, a vendor located in Virginia processed and mailed the 

two direct mail pieces (one in English, the other in Spanish). The file for this vendor 

included an email communication from a vendor representative to a representative of 

DECF requesting approval of the direct mail piece. The vendor also copied the Taddeo 

campaign on the email. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff provided DECF representatives with a schedule of 

the apparent excessive coordinated expenditures. In response, DECF stated its belief that 

it was authorized to spend an additional $22,400 because tiie DCCC had reported 

spending only $1,754 in coordinated campaign expenditures on behalf of candidate 

Taddeo. DECF also stated that the combined total spent on Taddeo was less than the 

$84,200 available^ DECF contends tiiat tiie DCCC and DECF coordinated to achieve 

tills and that the remaining authority would have been transferred to DECF. DECF also 

stated that the Taddeo mail pieces represented exempt activity. 

The Interim Audit Report recommended that DECF demonstrate that it did not exceed its 

coordinated spending limit by providing evidence that: 

• It received additional spending authority from tiie DCCC prior to spending in 

excess of its $60,000 limitation; and 

• There was volunteer involvement with respect to the direct mail pieces. 

Absent such evidence, the Interim Audit Report reconunended that DECF obtain a refund 

of $35,108 ($95,108 - $60,000) from Taddeo for Congress and provide evidence of tiie 

refund received. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report, DECF stated that tiie audit report correctiy states 

tiiat DECF reported coordinated expenditures of $95,108 on behalf of Annette Taddeo."^ 

DECF acknowledged that DECF paid for two media ads, totaling $82,400, on behalf of 

the candidate and that prior to making tiiese expenditures; tiie DCCC assigned $17,900 of 

its coordinated expenditure limit to DECF. DECF also submitted a letter, dated 

September 22.2011, from the DCCC to explain the coordinated expenditure autiiority. 

^ DECF had a coordinated expenditure spending limit of $42,100 and the National Party Committee also 

had a coordinated expenditure spending limit of $42,100. 

* Disclosure reports subject to this audit did not disclose any coordinated expenditures for Annette Taddeo. 

(See Finding 2.) 
The letter stated, "[t]he DCCC's current records show a transfer (of) $17,900 in 

coordinated expenditure authority in connection with this election to the Florida 

Democratic Party on October 29,2008. While we can locate no further records of other 

transfers of authority to your committee in connection with this election, we did support 

Ms. Taddeo's candidacy - botii before and after the date of the above transfer - and we 

know of no reason why any requested or needed transfer of authority would have been 

witiiheld at tiie time." 

Regarding the two mail pieces. DECF stated that the mail pieces were actually prepared 

with substantial volunteer participation and. therefore, met the volunteer materials 

exemption and should not be considered coordinated party expenditures. DECF also 

provided a copy of a photo that it believed demonstrated volunteer participation. In light 

of the lack of clarity in recent audits regarding the amount of volunteer involvement 

needed to qualify for the volunteer materials exemption, the Audit staff did not count the 

expenses toward tiie coordinated party expenditure limit. 

In response to the Interim Audit Report, neither DECF nor the DCCC could locate a 

record authorizing additional spending authority. As noted in the legal standards above, 

11 CFR § 109.33(a) requires that an assignment must be made in writing, state the amount 

of the authority assigned, and be received by the assignee before any coordinated party 

expenditure is made pursuant to the assignment. In similar cases, the Commission has 

rejected assignments of spending authority after the fact.^ Absent evidence of additional 

spending authority from the DCCC. DECF's coordinated spending limit was $60,000 

and DECF exceeded its coordinated expenditure limitation by $22,400 ($82,400 [media 

ad expenditures] - $60,000 [DECF's coordinated spending limit]). 

D. Draft Final Audit Report 

In the Draft Final Audit Report, tiie Audit staff noted that DECF had not demonstrated, in 

writing, that it was granted additional spending authority beyond $60,000. As a result, 

the Audit staff concluded that DECF exceeded its coordinated party expenditure 

limitation by $22,400 ($82,400 - $60,000). 

E. Committee Response to the Draft Final Audit Report 

DECF contended that the Final Audit Report should note that the combined coordinated 

expenditure limit of $84,200 was not exceeded for Annette Taddeo. DECF further added 

that "although there may have been a paperwork error with respect to the transfer of tiiis 

unused authority, the authority held by the DCCC was in fact, unused. Therefore, as a 

practical matter, the combined 441a(d), in total, had not been exceeded and thus, no 

unfair advantage had been conferred upon the DECF or the Taddeo campaign." 

Commission Conclusion 

On June 7,2012, the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff recommended the Conunission find that DECF 

exceeded its coordinated party expenditure limitation by $22,400. 

^ Final Audit Report on Missouri Democratic State Committee, MUR 5274. Final Audit Report on the 

California Republican State Committee, MUR 5246. 
10 

The Commission approved tiie Audit staffs recommendation. In reaching its conclusion, 

the Commission noted that, based on the reports filed by the Democratic Congressional 

Candidate Committee, the combined coordinated expenditure limit of $84,200 was not 

exceeded on behalf of tiie House candidate. 

Finding 2. Failure to Itemize Coordinated Party 

Expenditures 

Summary 

During fieldwork, the Audit staff identified 64 expenditures, totaling $207,665. which 

DECF did not itemize on Schedule F (Itemized Coordinated Party Expenditures). DECF 

made the expenditures on behalf of six congressional candidates. Subsequent to the start 

of audit fieldwork, DECF filed amended reports that substantially disclosed the 

expenditures in question as coordinated party expenditures on Schedule F. 

In response to the Interim Audit Report recommendation. DECF made no additional 

comments on this matter. DECF has corrected the public record with respect to these 

transactions. 

The Commission approved a finding that DECF failed to itemize coordinated party 

expenditures of $194,957. 

Legal Standard 

Reporting Coordinated Party Expenditures. Each political conunittee shall report the 

full name of each person who receives any expenditure from the reporting committee 

during the reporting period in connection with an expenditure under 11 CFR Part 109. 

Subpart D (2 U.S.C. §441a(d)). together witii the date, amount and purpose of any such 

expenditure as well as the name of, and office sought by the candidate on whose behalf 

tiie expenditure is made. 11 CFR §104.3 (b)(l)(viii). 

Facts and Analysis 

A. Facts 

The Audit staff identified 64 expenditures, totaling $207,665, that DECF did not itemize 

on Schedule F as coordinated party expenditures. The expenditures were made on behalf 

of six congressional candidates and included payments for staff salaries, direct mail, cell 

phones and media ads. Subsequent to the start of audit fieldwork, DECF filed amended 

reports that substantially disclosed the expenditures in question as coordinated party 

expenditures on Schedule F. 

B. Interim Audit Report & Audit Division Recommendation 

This matter was presented at the exit conference. In response, DECF stated tiiat it believes 

two of the disbursements, totaling $12,708, were volunteer mailings (Taddeo mail pieces 

discussed in Finding 1) and thus would not need to be reported on Schedule F. The Interim 
11 

Audit Report reconunended that DECF provide any additional information or comments it 

considered relevant to this matter. 

C. Committee Response to Interim Audit Report 

In response, DECF did not have any additional comments on this matter. As explained in 

Finding 1, tiiiere is a lack of clarity regarding the amount of volunteer involvement 

needed to qualify for the volunteer materials exemption. As a result, expenses for two 

direct mail pieces totaling $12,708 were not classified as coordinated party expenditures. 

Therefore, the amount of expenditures not previously itemized on Schedule F is $194,957 

($207,665 - $12,708). DECF has corrected tiie public record witii respect to tiiese 

transactions. 

D. Draft Final Audit Report 

In the Draft Final Audit Report, the Audit staff acknowledged that DECF has corrected 

the public record with respect to the transactions identified. DECF's response to the 

DT2£t Final Audit Report did not address this matter. 

Commission Conclusion 

On June 7.2012. the Commission considered the Audit Division Recommendation 

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

did not itemize coordinated party expenditures of $194,957 on Schedule F. 

The Commission approved tiie Audit staffs recommendation. 

Finding 3. Allocation of Expenditures 

Summary 

During fieldwork, the Audit staffs review of disbursements made from the federal and 

non-federal accounts identified an apparent non-federal overfunding of allocable activity 

by $107,536. 

DECF materially complied with the Interim Audit Report recommendation. DECF either 

accepted the Audit staff's position or provided documentation demonstrating that all nonfederal expenditures in question required less allocation. DECF's response reduced the 

non-federal overfunding of allocable activity to $84,364. 

After considering this finding, the Commission did not interpret the use of Creole 

translators as get-out-the-vote activity. Rather, the Commission agreed with DECF that it 

was an allocable expense to be paid on the administrative ratio. This further reduced the 

non-federal overfunding of allocable activity by $12,413, to $71,951. In addition, the 

Commission could not reach a consensus on whether DECF had properly allocated rent 

payments for its headquarters (the non-federal overfunding for rent was calculated as 

$28,482) between DECF and state caucus committees. Thus, tiie amount of non-federal 

overfunding of allocable activity on which the Commission could agree was $43,469 

($84,364 - $12,413 - $28,482), for which DECF transferred funds from its federal 

account to its non-federal account to correct the overfunding. 
12 

The Commission approved a finding that DECF's non-federal accounts overfunded its 

share of allocable activity by $43,469. 

Legal Standard 

A. Paying for Allocable Expenses. The Commission regulations offer party 

committees two ways to pay for allocable, shared federal/non-federal expenses. 

• They may pay the entire amount of the shared expense from the federal account 

and transfer funds from the non-federal account to the federal account to cover the 

non-federal share of that expense; or 

• They may establish a separate, federal allocation account into which the 

committee deposits funds from both its federal and non-federal accounts solely 

for the purpose of paying the allocable expenses. 11 CFR § 106.7(b). 

B. Transfers. Generally, a political committee may not transfer funds from its nonfederal account to its federal account, except when tiie committee follows specific rules 

for paying for shared federal/non-federal election activity. 11 CFR §§102.5(a)(l)(i) and 

106.7(f). 

C. Reporting Allocable Expenses. A state, district or local committee that allocates 

federal/non-federal expenses must report each disbursement it makes from its federal 

account (or separate allocation account) to pay for a shared federal/non-federal expense. 

Committees report these kinds of disbursements on Schedule H4 (Disbursements for 

Allocated Federal/Non-federal Activity). 11 CFR § 104.17(b)(3). 

D. Allocation Required for Generic Voter Drives. State and local party committees 

must allocate all of their costs for generic voter drives. A generic voter drive is an 

activity that urges the general public: 

• to register to vote; 

• to vote; or 

• to support candidates of a particular party or candidates who are associated with a 

particular issue, without mentioning a specific candidate. 11 CFR § 106.7(c)(5). 

E. Allocation Ratio for Administrative & Generic Voter Drive Costs. State and local 

party conunittees must allocate their administrative expenses and generic voter drive 

costs depending on which federal offices appear on tiie ballot for tiie election year. The 

minimum percentage of federal funds would be at least: 

• 36 percent if both a Presidential candidate and a Senate candidate appear on the 

ballot; 

• 28 percent if a Presidential candidate but not a Senate candidate appears on tiie 

ballot; 

• 21 percent if a Senate candidate but no Presidential candidate appears on the 

ballot; and. 

• 15 percent if neither a Presidential nor a Senate candidate appears on the ballot. 

llCFR§106.7(d)(2)and(3). 
13 

F. Allocation of Costs of Federal Election Activity. Expenditures for public 

communications as defined in 11 CFR 100.26 by state party committees tiiat refer to a 

clearly identified candidate for federal office and that promote, support, attack, or oppose 

any such candidate for federal office must not be allocated. Only federal funds may be 

used. llCFR§300.33(c). 

G. Allocation Ratio for Shared Fundraising Expenses. If a committee raises botii 

federal and non-federal funds through the same fundraising program or event, it must 

allocate the direct cost of the fundraising event based upon the ratio of funds received by 

tiie federal account to the total amount raised for tiie event. 11 CFR § 106.7(c)(4). 

H. Salaries and Wages. Committees must keep a monthly log of the percentage of time 

each employee spends in connection with a federal election. Employees who spend 25 

percent or less of their compensated time in a given montii on federal election activity or 

on activities in connection with a federal election must eitiier be paid only from the 

Federal account or have their salaries allocated as an administrative cost. 11 CFR 

§106.7(d)(l). 

Facts and Analysis 

A. Facts 

The Audit staff calculated tiie non-federal share of expenditures required to be disclosed 

on Schedule H4 and compared tiiat to the amount transferred from the non-federal 

account. It calculated that the non-federal portion of shared activity was $2,222,695. 

However, the non-federal account transferred $2,242,955. resulting in an overfunding of 

$20,260. 

In addition to the above, the following expenditures were paid directly from the nonfederal account but appear to represent 100 percent federal activity or allocable activity. 

• An absentee chase ballot ($3,745) that included a picture of President Bush and 

Vice President Cheney with a red line through the pictures and a caption stating, 

"We Can't Afford More Of The Same." The back side of tiie mailer stated, "Send 

the Republicans a Message - You can Make the Difference Vote Democratic" 

followed by a sample ballot listing the Democratic nominee for President and 

Vice President, Congressional Districts 2 and 4, State Senator District 3, State 

Representative Districts 8 and 9, County Conunissioner, City Conunissioner and 

District Supervisor. Further, an email between the Leon County Chair and DECF 

makes clear that the DECF expenditure was in connection with a federal election. 

Based on tiie above, the sample ballot should have been paid with federal funds. 

As a result, the non-federal account overpaid $3,745. 

• An invoice for $17,240. witii the description, "Consulting Fee for Creole 

Translators/Haitian American G.O.T.V." Support for this disbursement was not 

available for review. However, if the activity represents a public communication 

that named a clearly identified federal candidate, the cost would have to be paid 
14 

witii 100 percent federal fimds. If tiie cost represented get-out-the-vote activity, it 

could have been paid with a combination of federal and Levin funds. However, 

DECF did not maintain a Levin fund; therefore, only federal funds could be used. 

The only way that the cost could have been permissibly paid with 100 percent 

non-federal funds was if the activity had named only non-federal candidates and 

did not represent a get-out-the-vote effort. 

The Audit staff could not determine whether this payment was wholly nonfederal, allocable or wholly federal. Until DECF provided more information, the 

Audit staff assumed that DECF should have paid the cost entirely from the federal 

account. As a result, the Audit staff calculated that the non-federal account may 

have overpaid its share by as much as $17,240. 

• The total amount of rent paid for DECF's headquarters during the audit period 

was $212,313. According to DECF, tiie building is occupied by DECF, tiie State 

House Caucus and the State Senate Caucus (Caucus). With the exception of one 

month (January 2007). DECF paid half of the monthly rent directly from the nonfederal account and half from the federal account. Rent payments from the 

federal account were disclosed on Schedules H4 and allocated 28 percent federal 

and 72 percent non-federal. Thus, the non-federal account paid 86 percent of the 

rent for DECF headquarters. As a result, the Audit staff calculated that the nonfederal account overpaid its share of rent by $28,482 ($181,347 - $152,865). 

• DECF was not able to produce monthly time logs for six employees documenting 

their time spent on federal and non-federal activities. In addition, the records 

supplied by three individuals did not attest to working 25 percent or less of their 

time on federal activity for all the pay periods in which tiieir salaries were 

allocated between federal and non-federal activity. Absent records to document 

tiie activity engaged in by the employees in question, the Audit staff considered 

$23,172 to be a potentially non-allocable expense tiiat should have been paid 

entirely by the federal account. 

• The Audit staff reviewed 10 fundraising programs and events for tiie proper 

allocation of expenses between federal and non-federal accounts. DECF allocated 

the cost of each fundraising program or event in which DECF collected both 

federal and non-federal funds based on the funds received metiiod. One event, tiie 

2008 Jefferson Jackson Dinner, accounted for the amount of overfunding 

identified. The proportion of federal funds received to non-federal funds received 

as calculated by DECF was 8 percent federal to 92 percent non-federal. Per the 

Audit staffs calculation, the amount of funds received was 16 percent federal and 

84 percent non-federal. The review indicated that the non-federal account 

overpaid its share of the fundraising cost by $14,637. 

In sunmiary, the Audit staff calculated tiiat the non-federal account potentially 

overfunded its share of expenditures by $107,536 ($20,260 + $3,745 + $17,240 + 

$28,482+ $23,172 + $14,637). 
15 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter at tiie exit conference. In response. DECF stated 

that the cost of the absentee chase ballot ($3,745) and tiie consulting fee for Creole 

Translators/Haitian American G.O.T.V. ($17,240) represent non-federal activity. DECF 

did not provide any documentation supporting its position. 

With respect to the rent allocation and the Caucus. DECF stated that the Caucus is 

"considered an autonomous project of the state party ... they do not have a separate legal 

entity. Therefore, they did not sign the lease." DECF furtiier stated tiiat the Caucus 

employees are on the payroll of the state party, so they would technically qualify as 

employees of the party. 

The exit conference response did not address the lack of time records and allocation of 

fundraising expenses. 

The Audit staff has reviewed DECF's response and offers the following: 

Absentee Chase Ballot - DECF did not provide any documentation supporting its 

position that the mailer represented 100 percent non-federal activity. Tlie mailer clearly 

identified a candidate for federal office. The email between tiie Leon County Chair and 

DECF makes clear that the DECF expenditure was in coimection with a federal election. 

Therefore, DECF should have paid the cost of the absentee chase ballot witii federal 

funds. 

Consulting Fee for Creole Translators/Haitian American G.O.T.V. - DECF did not 

provide any documentation supporting its position tiiat the activity was 100 percent, nonfederal. As previously stated, until more information was provided. Audit staff assumed 

that DECF should have paid tiie cost entirely from the federal account. 

Rent Payments - A state party committee may either pay administrative costs, including 

rent, from its federal account, or allocate such expenses between its federal and nonfederal accounts, (11 CFR § 106.7(c)(2)). In the Explanation and Justification for section 

106.7(c), the Commission recognizes that state party conunittees engage in multiple nonfederal activities, but the Commission determined that the administrative costs underlying 

a state party committee's activities should be allocated. Therefore, the rent payments in 

question should have been allocated on a 28 percent federal and 72 percent non-federal 

basis. 

The Interim Audit Report recommended tiiat DECF eitiier (1) provide documentation that 

clarified and supported the non-federal nature of the noted expenditures or (2) reimburse 

the non-federal account $107,536. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report. DECF conceded that its non-federal account 

overfunded its shared activity by $43,469 ($20,260 [hiitial Overfunding] + $3,745 
16 

[Absentee Chase Ballot] + $4,827 [Consulting Fee for Creole Translators/Haitian 

American G.O.T.V. - 28 percent] + $14,637 [Fundraising]). DECF stated tiiat the federal 

account reimbursed the non-federal account accordingly. 

DECF's position was that the documentation provided verified that the consulting fee 

paid for the Creole Translators/Haitian American G.O.T.V. represented a shared activity 

that should have been allocated based on the administrative ratio of 28 percent federal 

and 72 percent non-federal. 

DECF also provided documentation demonstrating that the salary payments in question 

were for employees tiiat did not spend in excess of 25 percent of their time either on 

federal election activity or on activities in connection with a federal election in a given 

month. 

DECF disagreed that a portion of tiie headquarters rent requires allocation. DECF stated 

that tiie Florida State Caucus and Senate Committees serve as the campaign arm of the 

Democratic legislators for botii the Florida State House and Senate. DECF contended 

that due to state law, the state party was required to serve as fiscal agent for both the 

House and Senate Democratic Caucus Committees. Each Caucus Committee is 

responsible for raising its own funds and administering its own budget, established in 

consultation with DECF, which can only be utilized for state elections to the Florida 

House and Florida Senate. Although each staff member for each Caucus Committee is an 

employee of DECF. they are employed in consultation with leaders of each respective 

Caucus. 

DECF furtiier stated that, as a matter of law, the FECA and Conunission regulations do 

not consider a caucus committee as a party committee. Furthermore. Congress, during its 

2002 amendments, amended the FECA to specifically cover caucus committees 

separately in certain circumstances. In addition. DECF stated that none of the provisions 

added to the FECA or the Commission's regulations cover the ordinary administrative 

expenses of a caucus committee. 

After reviewing DECF's response to the Interim Audit Report, the Audit Staff concluded 

the expenditure for tiie Creole Translators/Haitian American G.O.T.V was a GOTV 

expense under tiie definition of GOTV applicable at the time of the expense. The Creole 

Translators activity qualified as "contacting" registered voters and "assisting" them in the 

act of voting. Therefore, tiie Audit staff concluded tiiat the expenditure was for GOTV 

activity and should have been paid with 100 percent federal funds. It is also maintained 

that the rent payments for the DECF headquarters are part of administrative costs that 

require allocation per 11 CFR § 106.7(c). 

Based on DECF's response, the Audit staff recalculated the apparent non-federal 

overfunding of allocable activity as $84,364. DECF's response materially complies with 

the Interim Audit Report recommendation. 

^ DECF's September 2011 bank statement verified the transfer of $43,469 from the federal account to the 

non-federal account. 
17 

D. Draft Final Audit Report 

In the Draft Final Audit Report, the Audit staff maintained that the expenditure for 

translators was for GOTV activity, tiiat DECF should have paid it with 100 percent 

federal funds and that DECF's apparent non-federal overfunding of allocable activity was 

$84,364. 

E. Committee Response to the Draft Final Audit Report 

In its response to the Draft Final Audit Report, DECF objected to the Office of General 

Counsel's interpretation of tiie use of Creole translators as GOTV activity. DECF stated 

that the translators merely provided translation services to any voter who was already at 

the polling place and desired to speak with an election official or required other 

translation services. 

Commission Conclusion 

On June 7.2012. the Commission considered the Audit Division Recommendation 

Memorandum in which the Audit staff reconunended the Commission find that DECF's 

non-federal account overfunded its share of allocable activity by $84,364. In reaching its 

conclusion, the Commission did not interpret the use of Creole translators as get-out-thevote activity. Rather, the Commission agreed with DECF that it was an allocable 

expense to be paid on the administrative ratio. This further reduced the non-federal 

overfunding of allocable activity by $12,413, to $71,951. In addition, the Commission 

could not reach a consensus on whetiier DECF had properly allocated rent payments for 

its headquarters ($28,482) between DECF and state caucus committees. Thus, the 

amount of non-federal overfunding of allocable activity on which the Conmiission could 

agree was $43,469 ($84,364 - $12,413 - $28,482), for which DECF transferred funds 

from its federal account to its non-federal account to correct the overfunding. 

The Commission approved a finding that DECF overfunded its allocable activity by 

$43,469. 

Finding 4. Misstatement of Financial Activity - Levin 

Fund 

Summary 

Throughout tiie audit period, DECF disclosed $6,438 as cash-on-hand for tiie Levin fimd 

account. However, DECF's Levin fund account closed in November 2006. In response 

to the Interim Audit Report recommendation, DECF filed an amended report that 

corrected the overstatement of cash-on-hand. 

The Commission approved a finding that DECF misstated its Levin fiind financial 

activity for 2007 and 2008. 
18 

Legal Standard 

Contents of Levin Reports. Each report must disclose: 

• The amount of cash-on-hand for Levin funds at the beginning and end of the 

reporting period; 

• The total amount of Levin fund receipts and disbursements (including allocation 

transfers) for tiie reporting period and for the calendar year; and 

• Certain transactions that require itemization on Schedule L-A (Itemized Receipts of 

Levin Funds) or Schedule L-B (Itemized Disbursements of Levin Funds). 

11 CFR §300.36 (b)(2)(B). 

Facts and Analysis 

A. Facts 

Disclosure reports filed by DECF indicated a cash balance in the Levin fiind account of 

$6,438. DECF disclosed this cash balance throughout the audit period. However. Levin 

fiind bank records indicated that tiie account was closed on November 16,2006. Other 

than the cash-on-hand balance, DECF did not disclose any Levin fund receipts or 

disbursements. 

B. Interim Audit Report & Audit Division Recommendation 

This matter was discussed witii DECF representatives at the exit conference. DECF 

representatives made no comment on this matter. In the Interim Audit Report, the Audit 

staff recommended that DECF amend its most recent report to correct the overstatement 

of Levin fund cash-on-hand. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report. DECF filed an amended report that corrected the 

overstatement of cash-on-hand. 

D. Draft Final Audit Report 

In the Draft Final Audit Report, tiie Audit staff acknowledged that DECF amended its 

reports tiiat corrected the overstatement of cash-on-hand. DECF's response to tiie Draft 

Final Audit Report did not address this matter. 

Commission Conclusion 

On June 7.2012, the Commission considered the Audit Division Recommendation 

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

misstated its Levin fund financial activity for 2007 and 2008. 

The Commission approved the Audit staff's recommendation. 

Finding 5. Disclosure of Disbursements 

Summary 

During audit fieldwork. the Audit staff calculated that disbursement entries, totaling 

$9,554,713, contained inadequate or incorrect disclosure infonnation. In response to the 
19 

Interim Audit Report recommendation, DECF filed amended reports that materially 

corrected the disclosure errors. 

The Commission approved a finding that DECF did not properly disclose disbursements 

of $9,554,713. 

Legal Standard 

A. Reporting Operating Expenditures. When operating expenditures to the same 

person exceed $200 in a calendar year, the committee must report the: 

• amount; 

• date when the expenditures were made; 

• name and address of the payee; and 

• purpose (a brief description of why the disbursement was made—see below). 

2 U.S.C. §434(b)(5)(A) and 11 CFR §104.3(b)(3)(i). 

B. Examples of Purpose. Adequate Descriptions. Examples of adequate descriptions 

of "purpose" include the following: dinner expenses, media, salary, polling, travel, party 

fees, phone banks, travel expenses, travel expense reimbursement, catering costs, loan 

repayment, or contribution refund. 11 CFR §104.3(b)(3)(i)(B). 

Inadequate Descriptions. The following descriptions do not meet the requirement for 

reporting "purpose": advance, election-day expenses, other expenses, expense 

reimbursement, miscellaneous, outside services, get-out-the-vote, and voter registration. 

11 CFR §104.3(b)(3)(i)(B) and Commission Policy Statement at 

www.fec.gov/law/policy/purposeofdisbursement/inadequate_purpose_list_3507. 

Facts and Analysis 

A. Facts 

The reported purpose of the disbursement, when considered with the identity of the 

disbursement recipient, must clearly specify why the disbursement was made. The Audit 

staff reviewed disbursements itemized by DECF for proper disclosure on both a sample 

and 100 percent basis. These reviews resulted in errors totaling $9,554,713. This amount 

comprises projected errors totaling $1,708,395 from the sample review and $7,846,318 in 

errors from tiie separate review conducted on a 100 percent basis.^ The disclosure errors 

identified in each review were similar. 

From the 100 percent review, more tiian $7,300,000 of the disclosure errors was for 

campaign materials that, for the most part, (1) described then-Senator Obama's position 

on issues, (2) compared then-Senator Obama and Senator McCain's position on issues or 

(3) were for get-out-the-vote telephone calls authorized by Obama for America. The 

majority of errors in the review were for inadequate or incorrect purposes disclosed. 

^ The error amount was projected using a Monetary Unit Sample with a 95 percent confidence level plus 

the results of a 100 percent review of items not in the sample population. The sample estimate could be 

as low as $1,350,377 or as high as $2,066,413. 
20 

Examples of incorrect purposes included the following: 

• Three mail pieces that described Senator McCain's position on an issue were 

disclosed as either "Absentee/Early Vote Mail" or "Direct Mail/Early Vote." The 

mail pieces did not discuss obtaining an absentee ballot or voting early. 

• A mail piece tiiat stated vote Obama and provided polling locations, voting and 

ride information was disclosed as "Generic Literature." 

Examples of inadequate purposes included tiie following: 

• Payments for automated phone banks by or on behalf of then-Senator Obama that 

asked for your vote or provided information on polling locations were disclosed 

as 'Telephone Calls" or "Generic Telephone Calls." 

• Payments for mail pieces that described then-Senator Obama's position on issues. 

Senator McCain's position on issues or the positions of both candidates were 

disclosed as Literature, Generic Mail, or Direct Mail. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter at tiie exit conference. In response, DECF 

representatives stated they would review this issue. The Interim Audit Report 

recommended that DECF amend its reports to conect the disclosure errors. 

C. Committee Response to Interim Audit Report 

In response, DECF filed amended reports that materially corrected the inadequate and/or 

incorrect disclosure information. 

D. Draft Final Audit Report 

In tiie Draft Final Audit Report, tiie Audit staff acknowledged tiiat DECF had amended 

its reports to materially correct tiie inadequate and/or incorrect disclosure information. 

DECF's response to the Draft Final Audit Report did not address this matter. 

Commission Conclusion 

On June 7,2012, the Commission considered tiie Audit Division Reconunendation 

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

did not properly disclose disbursements totaling $9,554,713. 

The Commission approved the Audit staffs recommendation. 

Part V 

Additional Issue 

I Allocation of Rent Paid for Committee Headquarters 

Summary 

During audit fieldwork, the Audit staff reviewed disbursements made from the federal 

and non-federal accounts and identified a non-federal overfunding of $28,482 related to 
21 

tiie overpayment of rent at DECF's headquarters. DECF disagreed with the Audit staff 

and maintained tiiat it had properly allocated the rent between federal and state offices. 

The Conmiission could not reach a consensus on whether DECF had properly allocated 

its rental payments between DECF and state caucus committees. The Commission did 

not approve the Audit staffs recommended finding by the required four votes. 

Pursuant to Conunission Directive 70, tiiis matter is discussed in the "Additional Issue" 

section. 

Legal Standard 

A. Paying for Allocable Expenses. The Commission regulations offer party 

committees two ways to pay for allocable, shared federal/non-federal expenses. 

• They may pay the entire amount of the shared expense from the federal account 

and transfer funds from tiie non-federal account to the federal account to cover the 

non-federal share of that expense; or 

• They may establish a separate, federal allocation account into which the 

committee deposits funds from both its federal and non-federal accounts solely 

for tiie purpose of paying the allocable expenses. 11 CFR § 106.7(b). 

B. Reporting Allocable Expenses. A state, district or local committee that allocates 

federal/non-federal expenses must report each disbursement it makes from its federal 

account (or separate allocation account) to pay for a shared federal/non-federal expense. 

Committees report these kinds of disbursements on Schedule H4 (Disbursements for 

Allocated Federal/Non-federal Activity). 11 CFR §104.17(b)(3). 

Facts and Analysis 

A. Facts 

During fieldwork, the Audit staff reviewed disbursements made from the federal and 

non-federal accounts and determined that the total rental payment for DECF's 

headquarters during tiie audit period was $212,313. According to DECF, the building is 

occupied by DECF, the State House Caucus and the State Senate Caucus (Caucus). With 

the exception of one month (January 2007). DECF paid half of the monthly rent directly 

from the non-federal account and half from tiie federal account. Rent payments from the 

federal account were disclosed on Schedule H4 and allocated 28 percent federal and 72 

percent non-federal. Thus, the non-federal account paid 86 percent of the rent for DECF 

headquarters.^ As a result, the non-federal account overpaid its share of rent by $28,482. 

^ For example, using DECF's payment methodology, a rental payment of $1,000 would be split in half 

($500 to federal/$500 to non-federal). Then, the federal portion ($500) would be furtiier allocated using 

the administrative ratio (28% federal/72% non-federal). As such, the total non-federal portion of the 

rental payment would be $860 or 86% [$S00 non-federal portion after 50/50 split + $360 ($500 federal 

portion after 50/50 split X 72% non-federal administrative ratio)]. 
22 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter at the exit conference. With respect to the rent 

allocation and the Caucus, DECF stated that the Caucus is "considered an autonomous 

project of tiie state party ... they do not have a separate legal entity. Therefore, they did 

not sign the lease." DECF further stated tiiat the Caucus employees are on the payroll of 

the state party, so technically they would qualify as employees of the party. 

The Audit staff reviewed DECF's response and offered tiie following: 

Rent Payments - A state party committee may either pay administrative costs, including 

rent, from its federal account, or allocate such expenses between its federal and nonfederal accounts, (11 CFR § 106.7(c)(2)). In the Explanation and Justification for section 

106.7(c). the Commission recognizes that state party committees engage in multiple nonfederal activities, but the Conunission determined that the administrative costs underlying 

a state party committee's activities should be allocated. Therefore, the rent payments in 

question should have been allocated on a 28 percent federal and 72 percent non-federal 

basis. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report, DECF disagreed that a portion of the 

headquarters rent requires allocation. DECF stated that the Florida State Caucus and 

Senate Committees serve as tiie campaign arm of the Democratic legislators for both the 

Florida State House and Senate. DECF contended tiiat due to state law, the state party 

was required to serve as fiscal agent for botii the House and Senate Democratic Caucus 

Committees. Each caucus committee is responsible for raising its own funds and 

administering its own budget, established in consultation with DECF, which can be used 

only for state elections to the Florida House and Florida Senate. Altiiough every caucus 

committee staff member is an employee of DECF, all are employed in consultation with 

leaders of each respective Caucus. 

DECF further stated that, as a matter of law, the FECA and Conunission regulations do 

not consider a caucus conunittee as a party committee. Furthermore. Congress, during its 

2002 amendments, amended the FECA to specifically cover caucus committees 

separately in certain circumstances. In addition. DECF stated tiiat none of the provisions 

added to the FECA or the Commission's regulations cover the ordinary administrative 

expenses of a caucus conimittee. 

After reviewing DECF's response to the Interim Audit Report, the Audit staff maintained 

tiiat tiie rental payments for tiie DECF headquarters are part of administrative costs tiiat 

require allocation per 11 CFR § 106.7(c). 

D. Draft Final Audit Report 

In the Draft Final Audit Report, the Audit staff maintained that the rent payments for the 

DECF headquarters are part of administrative costs that require allocation per 11 CFR 

§106.7(c). 
23 

E. Committee Response to the Draft Final Audit Report 

In response to the DFAR, DECF contended that the space was used by an autonomous 

arm of the DECF that worked exclusively in coimection with state legislative elections. 

DECF stated, "Parties do indeed have discreet projects that are exclusively related to nonfederal elections and the Cotnmission, in previous audits and in previous practice, has 

acknowledged this fact. There is no logical reason to prohibit a party committee from 

paying the office rent paid of a discreet, autonomous non-federal project of the party with 

100% non-federal funds." 

Commission Conclusion 

On June 7,2012, the Commission considered tiie Audit Division Reconunendation 

Memorandum in which the Audit staff recommended the Commission find that DECF's 

non-federal account overfunded its share of allocable activity by $28,482. 

The Conunission did not approve the Audit staff's recommended finding by the required 

four votes. The Commission could not reach a consensus on whether DECF had properly 

allocated its rental payments between DECF and state caucus conunittees. 

Pursuant to Conunission Directive 70, this matter is discussed in the "Additional Issue" 

section.