Final Audit Report of the 

Commission on the Republican 

Party of Minnesota 

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 

(die Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with die Act.* The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Futm'e 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 Republican Party of Minnesota is a state party committee 

headquartered in St. Paul, Minnesota. For more information, see 

chart on Committee Organization, p. 2. 

Financial Activity (p. 3) 

• Receipts 

o Individual Contributions $ 7,089,954 

o Political Committee Contributions 132,390 

o Transfers from Affiliates 6,297,089 

o Loans Received 511,101 

o Offsets to Operating Expenditures 164,596 

o Transfers from Nonfederal Accounts 1,235,414 

o Other Receipts 356,761 

Total Receipts $ 15,78735 

Disbursements 

o Operating Expenditures $4,319,592 

o Federal Election Activity 8,551,821 

o Transfers to Affiliates 1,262,473 

o Contributions to Federal Candidates 3,850 

o Independent Expenditures 335,266 

o Coordinated Expenditures 80,000 

o Loan Repayments 417,994 

o Contribution Refunds 19,810 

o Other Disbursements 419,223 

Total Disbursements $ 15,410,029 

Commission Finding (p. 5) 

• Misstatement of Financial Activity 

2U.S.C. §438(b). 
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 3 

Part III. Summary 

Commission Finding 4 

Part IV. Commission Finding 

Misstatement of Financial Activity 5 
Final Audit Report of the 

Commission on the Republican 

Party of Minnesota 

January 1, 2007 - December 31, 2008 
Parti 

Backgroimd 

Authority for Audit 

This report is based on an audit of the Republican Party of Miimesota (RPM), undertaken 

by die Audit Division of the Federal Election Commission (the Commission) in 

accordance with die Federal Election Campaign Act of 1971, as amended (the Act). The 

Audit Division conducted die audit pursuant to 2 U.S.C. §438(b), which permits die 

Commission to conduct audits and field investigations of any political committee diat is 

required to file a report imder 2 U.S.C. §434. Prior to conducting any audit under this 

subsection, the Commission must perform an intemal 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. 2 U.S.C. §438(b). 

Scope of Audit 

Following Commission approved procedures, the Audit staff evaluated various risk 

factors and, as a result, this audit examined: 

1. The disclosure of individual contributors' occupation and name of employer; 

2. The disclosure of disbursements, debts and obligations; 

3. The disclosure of expenses allocated between federal and nonfederal accounts; 

4. The consistency between reported figures and bank records; 

5. The completeness of records; and, 

6. Other committee operations necessary to the review. 

Audit Hearing 

RPM declmed the opportunity for a hearing before die Commission on die matter 

presented in this report. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates Republican Party of Minnesota 

• Date of Registration August 8,1975 

• Audit Coverage January 1,2007 - December 31,2008 

Headquarters St. Paul, Minnesota 

Bank Information 

• Bank Depositories Two 

• Bank Accounts Eleven 

Treasurer 

• Treasurer When Audit Was Conducted Andiony Sutton (3/19/07 - 7/9/09) 

David E. Sturrock (7/10/09 - Present) 

• Treasurer During Period Covered by Audit Marina Taubenberger (1/1/07- 3/18/07) 

Andiony Sutton (3/19/07 - 7/9/09) 

Management Information 

• Attended FEC Campaign Finance Seminar Yes 

• Used Commonly Available Campaign 

Management Software Package 

Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 
Overview of Financial Activity 

(Audited Amounts) 

Cash on hand @ January 1,2007 $65 

o Individual Contributions 7,089,954 

o Political Committee Contributions 132,390 

o Transfers from Affiliates 6,297,089 

o Loans Received 511,101 

o Offsets to Operating Expenditures 164,596 

o Transfers from Nonfederal Accounts 1,235,414 

o Other Receipts 356,761 

Total Receipts $ 15,787,305 

o Operating Expenditures 4,319,592 

o Federal Election Activity 8,551,821 

o Transfers to Affiliates 1,262,473 

o Contributions to Federal Candidates 3,850 

o Independent Expenditures 335,266 

o Coordinated Expenditures 80,000 

o Loan Repayments 417,994 

o Contribution Refunds 19,810 

o Other Disbursements 419,223 

Total Disbursements $ 15,410,029 

Cash on hand @ December 31,2008 $377,341 
Part III 

Summary 

Commission Finding 

Misstatement of Financial Activity 

A comparison of RPM's reported financial activity to its bank records revealed an 

understatement of receipts in 2007 by $75,267, an understatement of disbursements in 

2007 by $71,446 and an understatement of ending cash on hand at December 31,2008 of 

$174,238. Most of the reporting errors resulted from unreported transfers between 

RPM's federal and nonfederal accounts. Prior to the issuance of the interim audit report, 

RPM filed amended reports correcting most of die misstatements noted above. The 

Audit staff recommended that RPM file amended disclosure reports to correct the 

remainder of the misstatements. As a result of all amended reports filed, RPM materially 

corrected the misstatements. The Commission approved this finding. 

(For more detail, see p. 5) 
Part IV 

Commission Finding 

Misstatement of Financial Activity 

Summary 

A comparison of RPM's reported financial activity to its bank records revealed an 

understatement of receipts in 2007 by $75,267, an understatement of disbursements in 

2007 by $71,446 and an imderstatement of ending cash on hand at December 31,2008 of 

$174,238. Most of the reporting errors resulted from imreported transfers between 

RPM's federal and nonfederal accounts. Prior to the issuance of the interim audit report, 

RPM fded amended reports correcting most of the misstatements noted above. The Audit 

staff recommended that RPM file amended disclosure reports to correct the remainder of 

the misstatements. As a result of all amended reports filed, RPM materially corrected the 

misstatements. The Commission approved this finding. 

Legal Standard 

Contents of Reports. Each report must disclose: 

• The amount of cash on hand at the beginning and end of the reporting period; 

• The total amount of receipts for the reporting period and for the calendar year; and 

• The total amount of disbursements for the reporting period and for the calendar year; 

• Certain transactions that require itemization on Schedules A (Itemized Receipts), 

Schedules B (Itemized Disbursements), Schedules H3 (Transfers from Nonfederal 

Accounts for Allocated Federal/Nonfederal Activity), or Schedules H4 (Disbursements 

for Allocated Federal/Nonfederal Activity). 2 U.S.C. §434(b)(l), (2), (3), (4), and (5). 

Facts and Analysis 

A. Facts 

The Audit staff reconciled RPM's reported financial activity to its bank records for 2007 

and 2008. Below are charts that outline the discrepancies in both years followed by 

explanations of the misstatements, if known. 

2007 Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1,2007 

($28,325) $65 $28,390 

Understated 

Receipts $3,556,121 $3,631,388 $75,267 

Understated 

Disbursements $3,185,395 $3,256,841 $71,446 

Understated 

Ending Cash Balance 

©December 31,2007 

$342,401 $374,612 $32,211 

Understated 
The understatement of receipts resulted from the following: 

• Three unreported transfers from nonfederal accounts 

• Unexplained difference 

Understatement of Receipts 

The understatement of disbursements resulted from the following: 

• Unreported transfer to nonfederal account 

• Unreported Bank Fees 

• Unexplained difference 

Understatement of Disbursements 

$50,853 

24,414 

$75,267 

$50,000 

1,115 

20,331 

$71,446 

RPM transferred $50,000 from a federal account to a nonfederal account on October 18, 

2007. On October 24,2007, RPM transferred $50,000 back to die same federal account. 

These transfers were not reported. RPM officials provided no explanation for these 

transfers but the Audit staff determined that no nonfederal overfimding of federal activity 

resulted. 

2008 Activity 

Reported Bank Records Discrepancy 

Opening Cash Balance 

@ January 1,2008 

$342,401 $374,612 $32,211 

Understated 

Receipts $12,003,907 $12,155,917 $152,010 

Understated 

Disbursements $12,149,205 $12,153,188 $3,983 

Understated 

Ending Cash Balance 

@ December 31,2008 

$203,103^ $377,341 $174,238 

Understated 

On December 31,2008, the cash balance was understated mostiy as a result of a 2008 

beginning cash understatement and unreported receipts. 

B. Interim Audit Report & Audit Division Recommendation 

This matter was presented to die RPM counsel during die exit conference. The RPM 

counsel acknowledged the discrepancies in the reports and indicated that the corrections 

would be made as recommended by the auditors. 

In die interim audit report, die Audit staff recommended diat RPM amend its reports to 

correct the misstatements; amend its most recentiy fded report to correct the cash on 

hand balance widi an explanation that the change resulted from a prior period audit 

adjustment; and reconcile the cash balance of its most recent report to identify any 

^ RPM's beginning cash on its September Monthly 2008 report was $6,000 greater than its reported ending 

cash on the previous report. As a result of this discrepancy, the amounts in the "Reported" column do not 

total correctly. 
subsequent discrepancies that may impact the $174,238 adjustment recommended by the 

Audit staff. 

C. Committee Response to the Interim Audit Report 

In its response to the interim audit report, RPM correctiy noted that five transfers from a 

nonfederal account,^ treated as unreported in the interim audit report, were actually 

reported on amended reports prior to the audit. This did not affect the difference between 

reported and bank totals because the five transfers were included in reported totals. RPM 

still had underreported its receipts. However, these transfers were no longer considered 

to be part of the explanation for the reporting differences. Appropriate adjustments to 

this finding have been made for these items. 

RPM pointed out in its response that amended reports correcting the misstatements were 

filed prior to its receipt of die interim audit report. The Audit staff notes diat RPM also 

filed additional amended reports in response to the interim audit report and diat, as a 

result of all amended reports filed, RPM materially corrected die misstatements. These 

amended reports also corrected reported cash on hand. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged diat the amended reports sufficientiy 

disclosed the required information. 

Commission Conclusion 

The Commission approved this fmding. 

These transfers totaled $176,527 and all occurred in March 2008.