FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

April 26,2012 

MEMORANDUM 

To: The Commission 

Through: Alec Palmer 

Staff Director 

From: Patricia Carmona 

Chief Compliance Officer 

Tom Hintermister"^-^ 

Assistant Staff Director 

Audit Division 

Martin Favin 

Audit Manager 

By: CamillaReminsky ivjAy 

Lead Auditor \ j 

Subject: Audit Division Recommendation Memorandum on the National Right to 

Life Political Action Committee (NRLPAC) (A09-19) 

Pursuant to Commission Directive No. 70 (FEC Durective on Processmg Audit Reports), 

tfae Audit staff presents its recommendations below and discusses the findings in the 

attached Draft Final Audit Report (DFAR). The Office of General Counsel has reviewed 

this memorandum and concurs with the recommendations. 

NRLPAC submitted its response to the DFAR and requested an audit hearing on 

December 21,2011. On Febmary 15,2012, NRLPAC presented certam matters at an 

audit hearing before the Commission. 

Finding 1. Misstatement of Financial Activity 

The Audit staff recommends tfaat the Commission find that NRLPAC misstated its 

financial activity for calendar years 2007 and 2008. 

NRLPAC stated that the misstatement was tiie result of a bookkeeping error and 

explained that it became aware of this reporting error due to a negative cash-onhand balance on the FEC reports. NRLPAC discovered the cause of the error 

shortiy before it received the Audit Notification Letter. The Audit staff 
recommends that the Commission approve inclusion of NRLPAC*s explanation in 

the "Audit Hearing" section of the Proposed Final Audit Report (PFAR). 

Finding 2. Disclosure of Occupation and Name of Employer 

The Audit staff recommends that the Conmiission remove this finding from the 

PFAR. 

During die audit hearing, NRLPAC provided clarification with respect to its best 

efforts in obtaining contributor occupation and/or name of employer information. 

More specifically, NRLPAC explained how its contributor database recorded 

whether NRLPAC had sent a follow-up letter to contributors requesting the 

missing information. This information, in addition to the significant number of 

follow-up letters sent by NRLPAC, sufficientiy demonstrated that NRLPAC 

complied with the best efforts requurements at 11 CFR § 104.7(b). 

Scope Limitation. 

The Audit staff reconunends that the Commission approve the following revised 

scope limitation in the PFAR: 

NRLPAC satisfied the minimum recordkeeping requirements 

for 11 CFR §102.9 conceming disbursements. However, some 

of the disbursement records did not contain information 

necessary to verify tfae reporting of certam information 

pertaining to independent expenditures pursuant to 11 CFR 

§104.4 or the reporting of debts and obligations pursuant to 11 

CFR §104.11. 

In order to determme whetfaer notices for independent 

expenditures (radio and print ads) were required to be filed, the 

Audit staff needed invoices or broadcast station affidavits 

containing enough information to associate a dissemination 

date with a particular mdependent expenditure. In addition, tiie 

documentation provided to tfae auditors did not always detail 

the costs spent on behalf of each candidate; nor did the 

documents always contam infomiation as to which ads were 

aired or when a specific ad was run or mailer was sent. 

To verify the accuracy of debt reporting, tiie Audit staff needed 

dated invoices to determine whetiier they were requued to be 

disclosed as a debt based on tfae dates of uicurrence noted on 

the invoices. 

In its response to the DFAR and during tiie audit hearing, NRLPAC disagreed with 

tiie scope limitation presented in the DFAR. At tfae faearing, NRLPAC counsel 

maintained tfaat the committee had provided documentation for 83% of the media 

buys for its independent expenditures to tfae Audit staff and that these station 

affidavits indicated tfae dates tiiat the stations broadcasted the commercials. 
The Audit staff does not dispute that NRLPAC provided many of the missing 

records by the end of audit fieldwork. However, the documentation provided did 

not always contain enough information to verify dissemination dates; nor did it 

always break down tfae costs spent on behalf of each candidate. In addition, the 

affidavits were not always clear as to which ads were aired or when a specific ad 

was actually run. As a result, the Audit staff was unable to complete its testing in 

this area. 

If this memorandum is approved, a Proposed Final Audit Report will be prepared within 

30 days of tiie Commission's vote. 

In case of an objection. Directive No. 70 states tiiat the Audit Division Recommendation 

Memorandum will be placed on the next regularly scheduled open session agenda. 

Documents related to tfais audit report can be viewed in the Voting Ballot Matters folder. 

Should you have any questions, please contact Camilla Reminsky or Martin Favin at 694-

1200. 

Attachments: 

- Draft Final Audit Report of the Audit Division on the National Right to Life 

Political Action Committee 

- Office of General Counsel comments on Audit Division Reconunendation 

Memorandum on the National Right to Life Political Action Committee (A09-19) 

cc: Office of General Counsel 
Draft Final Audit Report of the 

Audit Division on the 

National Right to Life Political 

Action Committee 

January 1, 2007 - Decembeiv31, 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 

rq)orts under the 

Federal Election 

Campaign Act (tfae 

Act). Tfae Commission 

generally conducts such 

audits when a 

conunittee appears no| ^ 

to have met tiie -^^ ^ 

threshold requirements 

for substantial 

complianc 

About the Committee j^^2)^^ 

The National Right to Life Politic^ ActibnM9mmittee is a separate 

segregated fimd of the Natiqpl^iiht to Lire^i^omittee and is 

headquartered in Wasfain^n, DCI. For more in^b^ation, see tfae 

cfaart on the Committ^^i^rganization, p. 2. ~^%Y..^,:>:' 

Financial Acdvl%|^. 2)^^1^ ' 

• Receipts 

o From Individuals ^^Ifk 

o FroraiOj^er Political Comi^Vj!^ 

o Offse^pt&jl^ting Expenc 

Total 

Isbursement 

erating ^benditures' 

o^^ndependent E^enditures 

$ 3,662,627 

9,8S0 

4.051 

$3,676,528 

ontributions 

dit 

hether the 

lied 

Act* Th 

deteipiii^ 

committed 

with the limi 

prohibitions an3^|;.„, 

disclosure requin ' 

of the Act. 

Future Action " 

The Commission may 

initiate an enforcement 

action, at a later time, 

witfa respect to any of 

tfae matters discussed in 

this report 

er Committees 

$ 567,680 

2,804,925 

13,750 

$3,386,355 

II^Fiic^es and Recommendations (p. 3) 

Miss^^^SSlnt of Financial Activity (Finding 1) 

iiDiscloflLire of Occupation and Name of Employer (Finding 2) 

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

Audit Division on the 

National Right to Life Political 

Action Committee 

,;.f.;-. 

January 1, 2007 - Df^mber 31, 2008 

•?:i?i<.j*. 

•S. '£j;'"''*^J^'''''--';<L-. 

•:'%"i>'i 
Table of Contents 

Parti. Background 

Authority for Audit 

Scope of Audit 

Page 

Part II. Overview of Committee 

Part III. Summaries 

Findings and Recommendations -^.^ 

Finding 2. Disclosure of Occupation jandName of Emplo^J^ef i^. 

'•f.-.-.-ji-. . ...sr * 

Limitations ^ 

Committee Organization 4> '=??^|r^ ^ 

Overview of Financial Activity T^ ' ^^Slb . 

Part IV. Findings and Recommendati^^^s^ 

Finding 1. Misstatement of Financial Activity ^ 7 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the National Right to Life Political Action Committee 

(NRL PAC), undertaken by tfae Audit Division oftfae Federal Election Commission (the 

Commission) in accordance with tfae Federal Election Campaign Ac^of 1971, as 

amended (the Act). The Audit Division conducted tfae audit pursug^ttjo 2 U.S.C. 

§438(b), whicfa permits the Commission to conduct audits sndQ^i investigations of any 

political committee that is required to file a report under 2 yiSr^;^J,'^34. Prior to 

conducting any audit under tfais subsection, the Comnussip|r mus'^p^prm an intemal 

review of reports filed by selected committees to deteiminS^iJf' tfae rq^'^.. filed by a 

particular committee meet tfae tiveshold requirements^^^i^^ubstantial co^liance witii tfae 

Act. 2U.S.C.§438(b). 

Scope of Audit ^"^-^ # 

Following Commission-approved procedures, tfae Aut^^Efu evaluated various risk 

factors and, as a result, tfais audit examined: ^^\k>, 

1. the disclosure of disbursements, d^j^^d obligations;'-^t^^ 

the disclosure of individual contribii^^|c6^ation and ^^|dt employer; 

tfae consistency between reported fi^es ani(4^|}^.records; i^ ' 

the completeness of records; and % .j^'' ^^'^^^^^^^" 

other committee op^3@bns necessary ^'•'^'^—-— ^ ' review. 

Limitationp^^. 

In maintaining its dijstj|i^ 

requirements of 11 CFRij 

irds, NRL r^C satisfied the minimum recordkeeping 

'j^^j,l^mal documentation, such as invoices and 

broadcasjt^ti|l3|^davit^ not jmulf fe for review. In order to determine whetfaer 

or nof jSi&ts and oS^^l^ons ^i^ipaid in a timely manner or sfaould faave been reported as 

debS|tfae Audit staff-^l^ed tof^^j^tSd invoices. The invoice dates would indicate 

^A^'i,-.. J ,. . ' and wSether it was required to be reported under 11 CFR 

ine if notices of independent expenditures were required to 

4.4, the Audit staff needed to see invoices or broadcast station 

the dates of dissemination of tfaese independent expenditures. 

Without the propei^^documentation disclosing those dates of dissemination, tfae Audit staff 

was unable to ensure that all notices of independent expenditure were filed timely. 

Similarly, in to 

be filed under 1^^^^ 

affidavits that cont 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

Date of Registration July 12,1979 

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

Headquarters Washington. DQ^u-, 

Bank Information 

• Bank Depositories One ^ ^Wifj;,. 

TWQ,. • Bank Accounts 

Treasurer 

• Treasurer When Audit Was Conducted i^Carol Tobias (October 29^f QQ9,:r^ June 

%P11).%:. W 

Jo^|L|/![;'Lsmdrum (June tO, 2011 -

Pres^:,: 

• Treasurer During Period Covered B5^;^:^dit Amarie-^^yidad 

(January TW^J ^ September 3,2008) 

ij.gjarol Tobias':^>^'' 

I'CS^tember 4^2008 - December 31, 

2o6iE5'^^" 

Management Inforriiktlon 

Attended FEG^ flign Fifece Seminar Yes 

• Wfao Handled Accd^^jg aif%?'-^ -

Recor<|ffiemM^^ 

Paid staff 

Cash-on-hand|@iJanuary 1^007 

J ^ f .Financial Activity 

(ASlfted Amounts) 

$481,805 

Receipts 

o From Individuafelg^ ^sS' $ 3,662,627 

o From Other Politi(^^ommittees 9,850 

o Offsets to Operating Expenditures 4,051 

Total Receipts $ 3.676,528 

Disbursements 

o Operating Expenditures $ 567.680 

o Independent Expenditures 2,804,925 

o Contributions to Other Committees 13,750 

Total Disbursements $ 3,386,355 

Cash-on-hand @ December 31,2008 $ 771,978 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of NRL PACs reported figures ^tii bank records revealed 

a misstatement of receipts and cash-on-faand m 2007 and disbursem^ ai^.casfa-on-hand in 

2008. In 2007, NRL PAC overstated beguming cash-on-faand hYJ^i,932, understated receipts 

by $29,624 and overstated ending casfa-on-faand by $104,632. J^^^%^|||RL PAC overstated 

disbursements ;cashl|n-han^^^,l,300,378. In by $1,437,635 and understated the ending < 

response to tfae Interim Audit Report recommendation, ^j^>PAC filed anieofd^d rqiorts, 

properly disclosing 2007 and 2008 activity. Tfae NRL (^XC treasurer stated1iii||NRL PAC 

would reconcile its most recentiy reported casfa bala^^ and am^nd its cash bala^^|i the next 

disclosure report filed. ^' '^ ^-i^ . & -iS^ 

In addition, tfae original reports filed by NRL PAC for 200^^^2008 revealed an overstatement 

of disbursements in the amount of $687;5^6. NRL PAC did i^^ubmit any additional 

mfoimation or written comments in tes^l^^ e Interim A A«>ort . 

(For more detail, see p. 4) 

During audit fieldwork, 

contributions totaliuj 

employer. In addition;' 

infonnation for most of tHi 

recommendatio|.^^i^ PAi 

fix>m contEiMra^^^^i^pre 

Finding 2. Discloj|m|| of Occu^^n iipName of Employer 

sviS^^contributio^^&om individuals revealed that 1,044 

J,115#*^^ d disclosurd%f Ifae contributor's occupation and/or name of 

not documen|4^est efforts" to obtain, maintain and submit 

In res^nse to tfae Interim Audit Report 

ami disclosing additional information received 

see p. 7) 
Part IV 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of NRL PACs reported figures y^itfa bank records revealed 

a misstatement of receipts and casfa-on-faand in 2007 and disbursemente^^cash-on-hand in 

2008. In 2007, NRL PAC overstated beginning cash-on-hand byjffi6,932, understated receipts 

by $29,624 and overstated ending cash-on-hand by $104,632. L^lo&;NRL PAC overstated 

disbursements by $1,437,635 and understated tiie ending cash^-hand^^yf1,300,378. In 

response to tfae Interim Audit Report recommendation,2^Ub^I^P filec 

properly disclosing 2007 and 2008 activity. The NRL^j^LC^basurer stated"^ 

would reconcile its most recentiy reported casfa heX^M and anxpn.d its casfa 

disclosure report filed. 

d reports, 

^^NRLPAC 

ktWon tfae next 

' '••lil-fsi''. 

In addition, tfae original reports filed by NRL PAC for 20Q^ffi 2008 revealed an overstatement 

of disbursements in tfae amount of $687,^,3i5. NRL PAC did'no1^^bmit any additional 

information or written comments in respGll|^4Q.the Interim Aui^ljl^eport. 

Legal Standard 

Contents of Reports. Each report must disct^e: 

• tfae amount of casfa-on«}i^|^^ |he beginnin]|;$Etid end of tfaie reporting period; 

• the total amount o^j^eiptsf^le reportingl|||riod and for the calendar year; 

• tfae total amounl^^slAl^irsem^gl for tfae reporbpg period and for the calendar year; and 

• certain transactions tii^^uii;ii(i^ization on pBiedule A (Itemized Receipts), Schedule B 

(Itemized L^^ursemen^^r^niiluS^ Independent Expenditures). 2 U.S.C. 

§434(Sgi|^^^an;^ . 

FactH 

A, Misstai |n Amende r d Reports as Compared with Bank Records 

1. Facts 

During audit fielt^jd^^The Audit staff reconciled reported activity witfa bank records for 

calendar years 200Hiid 2008. Tfae following cfaarts outline the discrepancies for the 

beginning and ending cash balances, receipts and disbursements for each year. Succeeding 

paragraphs address tfae reasons for tfae misstatements, if known. 
2007 Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1,2007 

$612,737 $481,805 $130,932 

Overstated 

Receipts $53,518 $83,142 $29,624 

Understated 

Disbursements $102,265 $105,589 $3,324 

• js. Understated 

Ending Casfa Balance 

@ December 31.2007 

$563,990 $459,3^f' ' $104,632 

Overstated 

The overstatement of the beginning cash-on-hand by;$-l,3S^32 likelf ^suited from prior 

period discrepancies. ^i^'"'^'. ""^^-i 

Tfae understatement of receipts resulted from' thb;%)J[lowing:. 

• Bank interest not reported ' " " 

• Vendor refunds for radio ads not reported 

• Unexplained difference v.^:,^ 

Understatement of receipts 

The misstatements described above restl!|pd in'i^^^.^32 ov^tatement of tfae ending 

casfa-on-faand. '4 ^^1^ ^^l^^?*^ 

$>i4,771 

4,051 

10.802 

mm 

2008 Activity, ^ '' ^ \ 

Reported 1 i^i^ank Records Discrepancy 

Beginning Casfa Ball^^,^ ^ 

@JaoiM«lpaQ8 

$459,358 $104,632 

Overstated 

. $3,626,011 $3,593,386 $32,625 

Overstated 

''Oii^ursements P4,718,401 $3,280,766 $1,437,635 

Overstated 

Endin^^t^t^ Balance | ^ 

@ DecemilNll, 2008# 

$(528,400) $771,978 $1,300,378 

Understated 

Tfae overstatemeni||f'disbursements resulted from tfae following: 

• Unreported dilbursements $184,070 

• Disbursements to printing vendor reported ttvice (1,526,656) 

• Over-reported disbursements (80,357) 

• Unexplained difference (14.692'^ 

Net overstatement of disbursements $ 1.437.635 

The duplicate reportmg of $1,526,656 in disbursements to tfae printing vendor was due to 

incorrect reporting of indqpendent expenditures. NRL PAC paid for these independent 
B. 

expenditures in advance of the dissemination dates. NRL PAC should faave reported 

these advance payments on Schedule B, Line 21b, as operating expenditures. Once tfae 

committee distributed the printed materials, it sfaould faave subtracted tbe amounts of 

tfaese expenditures fix>m Line 21b and reported tfaem as independent expenditures on 

Scfaedule E. NRL PAC correctiy reported tfaese expenditures on Line 21b wfaen die 

payments were made, tfaen correctiy disclosed tfae independent expenditures on Scfaedule 

E upon dissemination of the materials. However, NRL PAC failed to subtract the amount 

of tiie independent expenditures from Line 21b. 

Tfae misstatements described above resulted in a $1,300,378 uxijj^l'sikbment of the endmg 

cash-on-faand. 

2. Interim Audit Report & Audit Division RecommeiKt^i^tion 

The Audit staff discussed tiie misstatements for 200^pi\2b08 witii ^^^AC 

representatives during the exit conference and prq^^ed copies of releva^^<^]|k papers 

detailing tfae misstatements. NRL PAC represgtilk^ves stated that tfae con^^g^ould file 

tfae necessaiy amended reports. Amended repSrnS|^d by PAC after the'g|tit 

conference corrected some, but not all, of tfae missi^L|^ts 

Tfae Interim Audit Report reconunen%yhat NRL PAC: '-^|||:» 

note^^ 

It report toIpiatify any subsequent 

" a^ustments; and 

_ _ Noting tfaat tfae adjustment is tfae 

result 

amend its reports to correct I^^i|st9|ements noted^myQ; 

reconcile the cash balance on it 

discrepancies tfaat could affect ti^rec^ 

adjust casfa c^^^^^saiy on its mo|^|^ent repi 

of pridir'^^^lidjustments. ^1 

3. Committee'Re^^^se to 

NRL PAC filed ameni^|^jO^^!|gQ|. r^oi|5'io properly disclose activity as 

recomm^^^^];|^ubs(i^u^t cdnini&i^^on with tfae current NRL PAC treasurer, fae 

state^i^l^me^^i^^e w<$^i:econcile ^e most recent cash balance and include the 

remS^d figure on tn^^^reporl^^^ |p comply with the recommendation. 

MisstJiil 

Records^ 

int of Activi^^eported on Original Reports as Compared witfa Bank 

1. Facts 

In addition to exalffiag the most recent reports filed by NRL PAC prior to tfae audit, the 

Audit staff comparlcl the origmal reports filed with the bank records and discovered a 

$687,536 overstatement of disbursements in 2007 and 2008. This misstatement was largely 

due to tfae incorrect reporting of independent expenditures as noted above. 

2. Interim Audit Report & Audit Division Recommendation 

Tfae Audit staff discussed tiie misstatements for 2007 and 2008 witii NRL PAC 

representatives during tfae exit conference and provided copies of relevant work papers 

detailing tfae misstatements. 
Tfae Interim Audit Report recommended tfaat NRL PAC submit any additional infonnation or 

written comments it considers relevant to the matter. 

3. Committee Response to Interim Audit Report 

NRL PAC did not submit any additional information or written comments regarding tfais 

matter. 

I Finding 2. Disclosure of Occupation and Nam^^pf Employer | 

Summary 

During audit fieldwork, a review of contributions from indivi^^s ris^^ed tfaat 1,044 

contributions totaling $146,115 lacked disclosure oftfae cojjitnwtor's o'»|i^ation and/or name of 

employer. In addition, NRL PAC did not document "besl^efifprC^" to obtaiii^|q^ntain and submit 

information for most of these contributions. In response to the Interim Audiilt^prt 

recommendation, NRL PAC filed amended reports^^closing actional infornutic^..]^^ 

fix)m contributors. ''' ^^-iil^, .J^;:.. ''^i^'' 

Legal standard 

A. Disclosure of Receipts. For each it^tiz^d contribution, mf ;ij|ommittee must provide: 

~ the full name and address (includin|p[|jjc^4e) of the conl^^t^^^r other source; 

tfae name of tfae contributor's employ^ (if^|^|»n^butor is ^ individual); 

tfae contributor's occupation (if tfae c^^butoi^ilM^^^dtial); 

tfae election to wfaic|p^ntribution or %g^Was desi^^d; 

tfae date of receif^'"'"'^M^ 

tfae amount; pj^ , % 

tfae aggregaui ei^i||a cyclM^ of all r&pts (witfain tfae same category) from tfae 

same source. 11 Cm^^mi^Mi^mi^ ) ^ U.S.C. §434(b)(3)(A). 

B. Best JBnorts Eiirai|^^omp'u|i^^ Wfaen tfae treasurer of a political committee sfaows tfaat 

ti^^^mmittee used b^t|tfforts^^^^elow) to obtain, maintain and submit the information 

xequf^.^y the Act, tfaSpmxnitte^fs'l^ and records will be considered in compliance 

witii tiiilfet. 2 U.S.C. §ffe(i). 

C. Definition of^^e^ Effo^i Tfae treasurer and tfae committee will be considered to faave used 

"best efforts" if%i|;x|,^^ittee satisfied all of tfae following criteria: 

• All written solicj^iiions for contributions included: 

o a clear requbt for tfae contributor's full name, mailing address, occupation, and name 

of employer; and 

o the statement that such reporting is required by Federal law. 

• Witfain 30 days of receipt of tiie contribution, tfae treasurer made at least one effort to 

obtain tfae missing information, in eitfaer a written request or a documented oral request. 

• Tfae treasurer reported any contributor information tfaat, altfaougfa not initially provided by 

tfae contributor, was obtained in a follow-up communication or contained in tfae 

committee's records or in prior reports tfaat the committee filed during the same two-year 

election cycle. 11 CFR §104.7(b). 
Facts and Analsrsis 

A. Facts 

A review of itemized contributions fix)m individuals revealed tfaat 1,044 contributions totaling 

$145,615, or 29 percent, of tfae dollar value of individual contributions itemized by NRL PAC, 

lacked disclosure of tfae contributor's occupation and/or name of employer. NRL PAC disclosed 

most of tfaese contributions with tfae notation ''requested" or "Infonnation Requested." 

For 708 of these contributions totaling $92,416, tfae committee providedkno evidence tfaat it faad 

exercised "best efforts" to obtain, maintain and submit the informati^^r'^is represents the 

majority of the individual contributions lacking tfae required infom^pn. For the remaining 336 

(1,044 - 708) contributions totaling $53,699, NRL PAC obtaindii^ll^quired information. It 

did not, faowever, amend its reports to disclose tfae additional'ii^ormati^^ 

;e, along 

B. Interim Audit Report & Audit Division Reconspllfebdatibn 

Tfae Audit staff presented tiiis matter to NRL PAC^^^sentati^s at tfae exit cof . 

witfa tfae appropriate work papers. In response, NR^^I^ couns^ stated tfaat appr^Mate 

amended reports would be filed. Amended reports fil^KNB^pkC after the exit conference 

reduced the dollar value of enors to $136,330, or 27 perc^^^^tiie dollar value of individual 

contributions itemized by NRL PAC. 

The Audit staff recommended that NRL PAI ^ bllowing iQi||lii: 

provide documentation tfaat it exerci^ ^^^|jP| 

required contributor infonnation; or ^^^"^ 

make an effort tp:^6i^||hose individ^^ lacking 

,to obtain, maintain and submit tfae 

required contributor information 

and provide d^ifunentai^pf sucfa effor^ (such as copies of letters/emails to the 

contributors^^iA^r phon4|^gs); and \ ^ ^.^^ 

• file amended Schi^^es ^^^aized Receipts) to disclose contributor infonnation in 

NRL PACs posseM^^^^^^^iSnt^tor information obtained in response to tfais 

C. Cdi^^ttee Responsc^^Jnteriim^ait Report 

In respom^^ilRL PAC filed^^ende4^cfaedules A tfaat materially corrected tiie missing 

contributor^l^miation. 
FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

Apri l 4, 2012 

MEMORANDUM 

TO: 

FROM: 

SUBJECT: 

Patricia Carmona 

Chief Compliance Officer 

Tom Hintermister 

Assistant Staff Director 

Audit Division 

Christopfaer Hugjfaey 

Deputy General Counsel 

r z Lawrence L. Calvert, Jr. y^/^ ^ 

Associate General Couns4^A.L^ 

General Law and Advice 

Lorenzo Holloway /ATf^ 

Assistant General Counsel 

Public Finance and Audit Advice 

Margaret J. Forman Wl'S ' 

Attomey 

Audit Division Recommendation Memorandum on tfae National 

Right to Life Political Action Conunittee (LRA 812) 

The Audit Division has submitted for our review the Audit Division 

Recommendation Memorandum ("ADRM") on tfae National Rigfat to Life Political 

Action Committee (**NRLPAC"). Tfae ADRM includes a scope limitation and two 

findings: Misstatement of Financial Activity (Finding I); and Disclosure of Occupation 

and Name of Employer (Finding 2). We agree with the Audit Division as to these 

findings; however, we recommend that tfae ADRM include more information pertaining 

to recommended cfaanges to the scope limitation as described below. If you have any 

questions, please contact Margaret J. Forman, the attomey assigned to this audit. 
Memorandum to Patricia Carmona and Tom Hintennister 

ADRM on National Right to Life PAC (LRA 812) 

Page 2 of2 

SCOPE LIMITATION SHOULD BE MORE SPECIFIC 

The Audit staff proposes in tfae ADRM to amend the scope limitation. We agree 

with tiie Audit Division's approach, but we tiiink tfaat the scope limitation requires 

additional explanation about what could not be tested and why the Committee's 

documents related to the independent expenditures were not sufficient. 

During the audit hearing, NRLPAC raised concerns about the language in the 

scope limitation and tfae auditors agreed tfaat it would be more accurate if they modified 

the language to clarify that some o/the disbursement records did not contain information 

necessary to verify tfae reporting of certain information pertaining to independent 

expenditures pursuant to 11 C.F.R. § 104.4 or tfae reporting of debts pursuant to 

11 CF.R. § 104.11. In making this cfaange, faowever, the Audit staff removed otiier 

language previously added in response to our advice. 

We had previously advised die Audit staff, in our comments to the Draft Final 

Audit Report ("DFAR"), to be more specific as to what it was about the Committee's 

reporting of debts and obligations, or of independent expenditures, that tiie audit was 

unable to fully test. Independent expenditure reporting, in particular, involves a number 

of different requirements, and it was not clear fh)m the draft version of the DFAR which 

of these requirements could not be sufficiently tested. Tfae auditors modified tiie DFAR 

to include additional sentences that addressed our concerns. We do not believe tfaat 

anytiiing has changed since the audit hearing that would eliminate this concem. We, 

tiierefore, recommend tiiat tiie Audit staff modify die ADRM to include tiiis information 

or explain why this information is no longer necessary. 

The ADRM sfaould also explain wfay tiie Committee's documentation of its 

independent expenditures was not sufficient. The Committee asserted, at tfae audit 

hearing, tiiat it had station affidavits supporting 83% of tfae media buys for its 

independent expenditures. The Committee claims that tfae station afiidavits sfaow the 

dates that tfae station broadcasted the commercial. The Committee contends that this 

information should be sufficient to allow tfae Audit Division to test for when tfae 

Committee disseminated its independent expenditures. The Committee's arguments, 

tfaerefore, raise tfae issue of wfay tfae Audit Division still maintains tfaat it could not test for 

tfae date tiiat the Committee disseminated the independent expenditures. 

We understand that the Audit Division faas several reasons wfay it maintains tfaat it 

cannot test for tfae date of dissemination. To resolve tfais issue, we believe tfaat the 

Commission should be aware of the underlying reasons for tfae Audit Division's position. 

We, tiierefore, recommend tfaat tiie Audit Division revise tiie ADRM to include tfais 

explanation.