Draft Final Audit Report of the 

Audit Division 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 coimnittee 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 m( 

the threshold 

requirements for 

substantial compliance 

with the Act,i..Thejiudit 

determiM^^heth( 

comript^ compliedN^dtfi' 

the 

prohibits 

disclosure requirements 

of the Act. 

Future Actioi 

The Commission i 

initiate an enforcement 

action, at a later time, 

with respect to the matter 

discussed in this report. 

About the Campaign 

Kind for Congress Commii 

committee for Ronald Kin 

States House of Reprei 

Congressional Distrii 

Wisconsin. For 

Organization 

Financial 

eceipts 

o ^Dnjributions fro: 

jntabutions from 

icipal campaign 

Ltic candidate for the United 

the state of Wisconsin, 3"* 

in La Crosse, 

ampaign 

o Operating Expenditures 

rotal Disbursements 

$ 602,932 

1,564,507 

5,001 

1,316 

S 2,173,756 

$ 1,180,511 

$ 1,180,511 

Finding and Recommendation (p. 3) 

• Untimely Deposit of Receipts 

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

Audit Division on 

Kind for Congress Committee 

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

Page 

Part I. Background 

Authority for Audit 

Scope of Audit 

Part 11. Overview of Campaign 

2 

2 
Parti 

Background 

Authority for Audit 

This report is based on an audit of Kind for Congress Conunittee (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 politil^ committee that is 

required to file a report under 52 U.S.C. §30104. Prior to co^mm^ny audit under this 

subsection, the Commission must perform an internal reviej^q^ports filed by selected 

committees to determine if the reports filed by a particufa^dominittee meet the threshold 

requirements for substantial compliance with the AcL 

le of employer; 

Scope pf Audit 

Following Commission-approved procedi 

factors and as a result, this audit examined: 

1. the receipt of excessive contributions and loans; 

2. the receipt of contributions from ^hi^ited sources;^ 

3. the disclosure of contributions: 

4. the disclosure of individual contribu^dm^c^ati^ and i 

5. the consistency between reported figums and^ahk^eot 

6. the completeness o^-e<SSrd^and 

7. other committee pt^raatidns ^cessary to the review." 

risk 
Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Date of Registration January 30,1996 ^ 

• Audit Coverage January l,2013/^efe^ber31,2014 

Headquarters La Crosse, WI'' < 

Bank Information /XX \ 

• Bank Depositories Seven^Xi XX 

• Bank Accounts On^4^e^d^, Six s^v^n"^ 

Treasurer \\ 

• Treasurer When Audit Was Conducted 4 ife^t SmitlKFebruary 10,^()l'^present) 

cWfes.Ma^x^uary 30,2Si09 -

2016) 

• Treasurer During Period Covered by^udit CharlesX^^ 

Management Information \x^ 

• Attended Commission Campaign Finanik 

Seminar 

• Who Handled AccountipgTffiid-v 

Recordkeeping Tasks^"^ N. \ 

^a\d StS^ 

JC)verra Lcial Activity 

Ljudit^'^mounts) 

Cash-on-hahd'^ January 1^21 13 ^ S 458,874 

Receipts \ X V 

0 Contributions'frpdijndividtials 602,932 

0 Contributions froV^li^^^ Committees 1,564,507 

0 Offsets to Operating^Bx^enditures 5,001 

0 Other Receipts ^ 1,316 

Total Receipts $ 2,173,756 

Disbursements 

0 Operating Expenditures 1,180,511 

Total Disbursements S 1,180,511 

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

Summary 

Finding and Recommendation 

Untimely Deposit of Receipts 

During audit fieldwork, a review of contributions from political ittees determined 

that KFCC failed to deposit, within 10 days of receipt, cont^l^ taling $581,719 

received during the 2014 election cycle. In response to th^te dit Report 

recommendation, KFCC acknowledged the finding and $mted t] is taken several 

measures to ensure future compliance with regard tq^^ti^F^dep it^ receipts. (For 

more detail, see p. 4.) 
Part IV 

Finding and Recommendation 

Untimely Deposit of Receipts 

Summary 

During audit fieldwork, a review of contributions from political 

that KFCC failed to deposit, within 10 days of receipt, contribi 

received during the 2014 election cycle. In response to the Ij 

recommendation, KFCC acknowledged the finding and i 

measures to ensure future compliance with regard to timely de 

Legal Standard 

A. Timing of Deposits. A treasurer of a 

deposits of contributions. These deposi' 

receipt of the contribution. 11 CFR § 103. 

littees determined 

^ns^taling $581,719 

Audit Report 

has taken several 

siibf its receipts. 

jhee is respor»ibWOT making 

ithin 10 the 

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

$50 for a political committee 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, the 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)^ 

id Anali 

A. Fact^ 

During audits^dwork, the Audit staff utilized a combination of sample testing and 

focused reviews.^identi^^e untimely deposit of contributions received from political 

committees. Th^^pl«esting and focused reviews identified untimely deposit errors 

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

political committee^On average, the time between receipt and deposit of these 

contributions was 26 days, ranging from 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 ^e receipt date 

^ 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 S492,045 and as high as $625,394. 
reported in its FEC disclosure filings was the date the contribution was received by 

KFCC. Based on this afTirmation, 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 staff 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 ofjtie contributor check to 

its deposit. ^ 

B. Interim Audit Report & Audit Division Recommen^fiot 

The Audit staff discussed this matter with KFCC repr^^atives'dmiiig the exit 

conference at the conclusion of audit fieldwork, andU^rosjidW them v(iuKWork papers 

detailing the untimely deposited contributions. T^£^presentatives stat^lmt the 

contributions from political committees were^roftwd by JKrepresentativ^n^WjfShington, 

D.C. and mailed to their Wisconsin office ford^qaty Acc^c^ng to the remdsentatives, 

the mail delivery from Washington, D.C. to its ofEcl3^nHL{(Crosse, Wisconsin sometimes 

took up to 10 days. As a result, KFQC^as not able t^j^lv deposit these contributions. 

Furthermore, the representatives stateM^BaUhey were uncerKdn of the actual date of 

receipt of these contributions and they i 

contributions were received in Wa 

that, in the future, they would look at varic 

deposited. The Audit: 

the deposits locally^ 

city. Then,the: 

reporting purposes, etc> 

reduce the ipaii^elu(ery 

these 01 

confe 

ted that tl 

utilized a 

Id email a li: 

lit-stafjf also si 

^iseei 

inal 

whether ifsh^ra be the date the 

.>pr^.&ossg^isconsin. They added 

^"Tib-eMi^contributions were timely 

spresent^ive in Washington, D.C. make 

jnal bank with many locations within the 

contributions to KFCC for 

the use of express shipping to 

: representatives said they would consider 

ation was provided in KFCC's response to the exit 

In accordancb«^th 11 CFR §102.Sl^), the date of receipt is the day the KFCC 

representative^mvWashingt m; D.C. obtains possession of the contribution.' The 

representative ita^ashing^, D.C. was an authorized agent of the treasurer who was 

allowed to accepibi^ntTi^uons on behalf of KFCC. Therefore, KFCC must ensure that 

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

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

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 from 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). Advisory Opinion 1992-29 (Holtzman). 
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 epsipre compliance with 

all applicable rules. 

• Wisconsin staff now makes deposits of contributior 

timely deposit of all contributions received in W§ 

• It has a new campaign treasurer, and campaig 

training regarding compliance rules. 

• When donations are received by campai^staff in Washington,^E^5^, the 

contributions are now deposited direc^^mq a D.C^branch of theii'finlimial 

institution. 

• Keeping all additional records relevant to wlibi^c^tributions are received, 

including envelopes and addMonnl paperwork. 

L weekly basis to ensure 

).C. 

additional 

KFCC stated "that the statute and FEC 

deposits - they could easily be read to al 

delivery to rural areas, sucb^i^a Crosse, 

one-size-fits-all policy^'^im^ess of 

ct to the timeliness of 

also reiterated that mail 

ce weeks and that "the FEC's 

^tske into account that mail 

delivery in rural areds is gene^lv much slowi^than in big cities or on the coasts.' 

The Audit staff acknowli 

with the reiqgife^it&.of 11 

some wipfutte^ 

establMmg deposit j 

conmrat|phJs received 

deposited wmiin 10 days, 

timely deposit-^xiontribut 

ges that KFCC has made to comply 

§rilF3:3(a).>While there are mail delivery challenges that 

face, the Commission has addressed this matter by 

- > Pf of ^0 contribution. It is not until after the 

setre^ufer or the treasurer's authorized agent that it must be 

' : Commission established this guidance to promote the 

checks. 

The provisions at issu^^he KFCC response are 11 CFR §103.3(a), which requires that 

all receipts by a poli^dm committee 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 Act and Commission regulations are clear regarding the time frame for. depositing 

contributions regardless of whether those contributions are received directly by the 

treasurer or by an individual acting on behalf of the committee. Contributions must be 

deposited within 10 days of receipt. 11 CFR §103.3. The Commission has stated that 

when a conunittee representative or agent receives a contribution, the receipt of that 
contribution is imputed to the committee's treasurer and thus must be deposited within 10 

days of the treasurer's or agent's receipt.^ 

' Advisoiy Opinion 1992-29 (Holtzman) - see also footnote 5.