Final Audit Report of the 

Commission on 

Kind for Congress Committee 

(January 1, 2013 - December 31, 2014) 

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 not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.' The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and . 

disclosure requirements 

of the Act. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to the matter 

discussed in this report. 

About the Campaign (p. 2) 

Kind for Congress Committee is the principal campaign 

committee for Ronald Kind, Democratic candidate for the United 

States House of Representatives from the state of Wisconsin, 3"* 

Congressional District, and is headquartered in La Crosse, 

Wisconsin. For more information, see the Campaign 

Organization chart, p.2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals 

o Contributions from Political 

Committees 

o Offsets to Operating 

Expenditures 

o Other Receipts 

Total Receipts 

• Disbursements 

o Operating Expenditures 

Total Disbursements 

$ 602,932 

1,564,507 

5,001 

1,31.6 

S 2,173,756 

$1,180,511 

$ 1,180,511 

Commission Finding (p. 3) 

• Untimely Deposit of Receipts 

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

Commission on 

Kind for Congress Committee 

(January 1, 2013 - December 31, 2014) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Audit Hearing 1 

Part II. Overview of Campaign 

Campaign Organization 2 

Overview of Financial Activity 2 • 

Part III. Summary 

Commission Finding 3 

Part IV. Commission Finding 

Untimely Deposit of Receipts 4 
Parti 

Background 

Authority for Audit 

This report is based on an audit of Kind for Congress Committee (KFCC), undertaken by 

the Audit Division of the Federal Election Commission (the Commission) in accordance 

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

Division conducted the audit pursuant to 52 U.S.C. §30111(b), which permits the 

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

required to file a report under 52 U.S.C. §30104. Prior to conducting any audit under this 

subsection, the Commission must perform an internal review of reports filed by selected 

committees to determine if the reports filed by a particular committee meet the threshold 

requirements for substantial compliance with the Act. 52 U.S.C. §30111(b). 

Scope of Audit 

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

factors and as a result, this audit examined: 

1. the receipt of excessive contributions and loans; 

2. the receipt of contributions froiti prohibited sources; 

3. the disclosure of contributions received; 

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

5. the consistency between reported figures and bank records; 

6. the completeness of records; and 

7. other committee operations necessary to the review. 

Audit Hearing 

KFCC declined the opportunity for a hearing before the Commission on the matter 

presented in this report. 
Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Date of Registration January 30,1996 

• Audit Coverage January 1,2013 - December 31,2014 

Headquarters La Crosse, WI 

Bank Information 

• Bank Depositories Seven 

• Bank Accounts One checking. Six savings 

Treasurer 

• Treasurer When Audit Was Conducted Brent Smith (February 10,2016 - present) 

Charles Marx (January 30,2009 -

February 9,2016) 

•. Treasurer During Period Covered by Audit Charles Marx 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

No 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand ® Januair 1.2013 S 458,874 

Receipts 

o Contributions from Individuals 602,932 

o Contributions from Political Committees 1,564,507 

o Offsets to Operating Expenditures 5,001 

o Other Receipts 1,316 

Total Receipts S 2,173,756 • 

Disbursements 

o Operating Expenditures 1,180,511 

Total Disbursements S 1,180,511 

Cash-on-hand ® December 31,2014 S 1,452,119 
Part III 

Summary 

Commission Finding 

Untimely Deposit of Receipts 

During audit fieldwork, a review of contributions fn)m political committees determined 

that KFCC failed to deposit, within 10 days of receipt, contributions totaling $581,719 

received during the 2014 election cycle. In response to the Interim Audit Report 

recommendation, KFCC acknowledged the finding and stated that it has taken several 

measures to ensure future compliance with regard to timely deposit of its receipts. As 

such, KFCC complied with the Interim Audit Report recommendation. KFCC reiterated 

its corrective measures in its response to the Draft Final Audit Report. 

The Commission approved the finding that KFCC untimely deposited contributions 

totaling $581,719. (For more detail, see p. 4.) 
Part IV 

Commission Finding 

Untimely Deposit of Receipts 

Summary 

During audit fieidwork, a review of contributions from political committees determined 

that KFCC failed to deposit, within 10 days of receipt, contributions totaling $581,719 

received during the 2014 election cycle. In response to the Interim Audit Report 

recommendation, KFCC acknowledged the finding and stated that it has taken several 

measures to ensure future compliance with regard to timely deposit of its receipts. As 

such, KFCC complied with the Interim Audit Report recommendation. KFCC reiterated 

its corrective measures in its response to the Draft Final Audit Report. 

The Commission approved the finding that KFCC untimely deposited contributions 

totaling $581,719. 

Legal Standard 

A. Timing of Deposits. A treasurer of a political committee is responsible for making 

deposits of contributions. These deposits must be made within 10 days of the 

receipt of the contribution. 11 CFR §103.3(a). 

B. Receipt of Contributions. Every person who receives a contribution in excess of 

$50 for a political cormnittee which is an authorized committee shall, no later than 

10 days after receipt of the contribution, forward to the treasurer of the committee: 

The contribution, ^e name and address of the contributor; and the date of receipt of 

the contribution. If the amount of the contribution is in excess of $200, such person 

shall forward the contribution, the identification of the contributor in accordance 

with 11 CFR 100.12, and the date of receipt of the contribution. Date of receipt 

shall be the date such person obtains possession of the contribution. 52 U.S.C. 

§30102(b)(l) and 11 CFR §102.8(a). 

Facts and Analysis 

A. Facts 

During audit fieidwork, the Audit staff utilized a combination of sample testing and 

focused reviews to identify the untimely deposit of contributions received from political 

committees. The sample testing and focused reviews identified untimely deposit errors 

totaling $581,719.^ This amount represents approximately 37% of all contributions from 

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

plus the result of a focused review of contributions not included in the sample population. The sample 

estimate could be as low as $492,043 and as high as $625,394. 
political committees. On average, the time between receipt and deposit of these 

contributions was 26 days, ranging fh)m 14 to 100 days. 

During this review, the Audit staff asked KFCC officials which date they used on the 

FEC disclosure reports. A KFCC representative responsible for the daily input of 

contributions informed the Audit staff, on more than one occasion, that the receipt date 

reported in its FEC disclosure filings was the date the contribution was received by 

KFCC. Based on this affirmation, the Audit staff used the date of receipt provided in 

KFCC's receipts database (which agreed with the date of receipt reported on the 

disclosure reports) to determine the number of days it took KFCC to deposit its 

contributions. 

However, because KFCC representatives later expressed some uncertainty about the 

validity of the actual dates of receipt (see discussion below), the Audit st^ revised its 

calculation and used the date of the contributor check (plus three days for mailing) as the 

date of receipt in determining the number of days from receipt of the contributor check to 

its deposit. ^ 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with KFCC representatives during the exit 

conference at the conclusion of audit fieldwork, and provided them with work papers 

detailing the untimely deposited contributions. The representatives stated that the 

contributions from political committees were received by a representative in Washington, 

D.C. and mailed to their Wisconsin office for deposit.^ AccoMing to the representatives, 

the mail delivery from Washington, D.C. to its office in La Crosse, Wisconsin sometimes 

took up to 10 days. As a result, KFCC was not able to timely deposit these contributions. 

Furthermore, the representatives stated that they were uncertain of the actual date of 

receipt of these contributions and they questioned whether it should be the date the 

contributions were received in Washington, D.C. or La Crosse, Wisconsin. They added 

that, in the future, they would look at various ways to ensure contributions were timely 

deposited. The Audit staff suggested that the representative in Washington, D.C. make 

the deposits locally since KFCC utilized a national bank with many locations within the . 

city. Then, the representative could email a list of the contributions to KFCC for 

reporting purposes, etc. The Audit staff also suggested the use of express shipping to 

reduce the mail delivery time to Wisconsin. The representatives said they would consider 

these options. No additional information was provided in KFCC's response to the exit 

conference. 

In accordance with 11 CFR § 102.8(a), the date of receipt is the day the KFCC 

representative in Washington, D.C. obtains possession of the contribution. ^ The 

This method of determining a receipt date is utilized by the Audit staff when the actual receipt date is 

unknown. There was a minor decrease in the error total using this method. 

Contributions fi-om individuals were usually mailed directly to the KFCC office in La Crosse, WI. 

The Act and Commission regulations contemplate that the treasurer will have authorized agents to 

receive contributions and make expenditures for the committee. 11 CFR §102.9. The receipt of a 

contribution by an authorized agent is the equivalent of the treasurer's receipt and triggers the 10-day 

deposit period at 11 CFR § 103.3(a). Advisoiy Opinion 1992-29 (Holtzman). 
representative in Washington, D.C. was an authorized agent of the treasurer who was 

allowed to accept contributions on behalf of KFCC. Therefore, KFCC must ensure that 

deposits are made within 10 days of its Washington, D.C. representative's receipt to 

comply with the requirements of 11 CFR § 103.3(a). 

The Interim Audit Report recommended that KFCC provide evidence demonstrating that 

the contributions in question were deposited timely or submit any additional comments 

relevant to this matter. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, KFCC acknowledged the issue 

and stated that it has proactively taken a number of steps to fix this situation in the future. 

To ensure that all contributions are deposited in a timely manner, KFCC stated that it had 

made the following changes. 

• It has engaged a professional compliance firm to further ensure compliance with 

all applicable rules. 

• Wisconsin staff now makes deposits of contributions on a weekly basis to ensure 

timely deposit of all contributions received in its district. 

• It has a new campaign treasurer, and campaign staff has received additional 

training regarding compliance rules. 

• When donations are received by campaign staff in Washington, D.C., the 

contributions are now deposited directly into a D.C. branch of its financial 

institution. 

• - Keeping all additional records relevant to when contributions are received, 

including envelopes and additional paperwork. 

KFCC stated ".. .that the statute and FEC rules are unclear with respect to the timeliness 

of deposits - they could easily be read to allow 20 days..." KFCC also reiterated that 

mail delivery to rural areas, such as La Crosse, Wisconsin, can take weeks and that "[t]he 

FEC's one-size-fits-all policy on timeliness of deposits does not take into account that 

mail delivery in rural areas is generally much slower than in big cities or on the coasts." 

The Audit staff acknowledges the procedural changes that KFCC has made to comply 

with the requirements of 11 CFR § 103.3(a). While there are mail delivery challenges that 

some committees in rural areas may face, the Commission has addressed this matter by 

establishing deposit guidance after receipt of the contribution. It is not until after the 

contribution is received by the treasurer or the treasurer's authorized agent that it must be 

deposited within 10 days. The Commission established this guidance to promote the 

timely deposit of contributor checks. 

The provisions at issue in the KFCC response are 11 CFR §103.3(a), which requires that 

all receipts by a political conunittee be deposited within 10 days of the treasurer's receipt, 

and 11 CFR § 102.8(a), which requires every person who receives a contribution for an 

authorized political committee to forward the contribution to the treasurer no later than 

10 days after receipt. 
The Commission's regulations are clear that a committee's contributions must be 

deposited within 10 days of receipt by the committee's treasurer. 11 CFR §103.3. The 

Commission has also stated that when a treasurer's agent receives a contribution, thereceipt of that contribution is imputed to the committee's treasurer and thus must be 

deposited within 10 days of the agent's receipt.® Because an agent of KFCC's treasurer 

received the contributions at issue in this report, KFCC was required to deposit those 

contributions within 10 days of receipt. 

D. Draft Final Audit Report 

The Draft Final Audit Report acknowledged KFCC's corrective actions in response to the 

Interim Audit Report recommendation. 

E. Committee Response to Draft Final Audit Report 

KFCC reiterated its corrective measures in its response to the Draft Final Audit Report. 

Commission Conclusion 

On February 8,2017, the Cotiunission considered the Audit Division Recommendation 

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

KFCC untimely deposited contributions totaling $581,719. 

The Commission approved the Audit staffs recommendation. 

Advisory Opinion 1992-29 (Holtzman) - see also footnote S.