Draft Final Audit Report of the 

Audit Division on 

Jill Stein for President 

(January 17, 2015 – December 31, 2016) 

Why the Audit 

Was Done 

Federal law requires 

the Commission to 

audit every political 

committee established 

by a candidate who 

receives public funds 

for the primary 

campaign.1 The audit 

determines whether the 

candidate was entitled 

to all of the matching 

funds received, 

whether the campaign 

used the matching 

funds in accordance 

with the law, whether 

the candidate is entitled 

to additional matching 

funds, and whether the 

campaign otherwise 

complied with the 

limitations, 

prohibitions, and 

disclosure requirements 

of the election law. 

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 Campaign (p. 3)

Jill Stein for President is the principal campaign committee for Jill 

Stein, a candidate for the Green Party nomination for the office of 

President of the United States. The Committee is headquartered in 

Lexington, Massachusetts. For more information, see the chart on the 

Campaign Organization, p. 3. 

Financial Activity2 (p. 4)

 Receipts

o Contributions from Individuals 

o Matching Funds Received 

o Loans Received 

o Offsets to Operating Expenditures 

Total Receipts 

$ 11,010,439 

456,035 

40,000 

716,735 

$ 12,223,209 

 Disbursements

o Operating Expenditures 

o Transfers to Other Authorized 

Committees 

o Fundraising Disbursements 

o Contribution Refunds 

o Other Disbursements 

Total Disbursements

$ 11,885,379 

22,300 

15,156 

2,465 

250 

$ 11,925,550 

Findings and Recommendations (p. 5) 

 Net Outstanding Campaign Obligations - Surplus (Finding 1) 

 Matching Funds Received in Excess of Entitlement (Finding 2) 

 Misstatement of Financial Activity (Finding 3) 

 Reporting of Debts and Obligations (Finding 4) 

 

1

 26 U.S.C. §9038(a). 

2

 These figures contain primary, general and recount activity. The general and recount activity combined 

accounted for approximately $9,590,974, or 78% of total receipts, and approximately $9,618,886 or 81% of 

total disbursements. See Committee Structure on p. 1. 
Draft Final Audit Report of the 

Audit Division on 

Jill Stein for President 

(January 17, 2015 – December 31, 2016) 
Table of Contents 

 Page

Part I. Background 

 Authority for Audit 1 

 Scope of Audit 1 

 Committee Structure 1 

 Commission Guidance 2 

 Inventory of Campaign Records 2 

Part II. Overview of Campaign 

Campaign Organization 3 

 Overview of Financial Activity 4 

Part III. Summaries 

Findings and Recommendations 5 

 Summary of Amounts Owed to the United States Treasury 6 

Part IV. Findings and Recommendations 

Finding 1. Net Outstanding Campaign Obligations - Surplus 7

Finding 2. Matching Funds Received in Excess of Entitlement 14

Finding 3. Misstatement of Financial Activity 15

Finding 4. Disclosure of Debts and Obligations 18
 1 

Part I 

Background 

Authority for Audit 

This report is based on an audit of Jill Stein for President (JSFP), undertaken by the Audit 

Division of the Federal Election Commission (the Commission) as mandated by Section 9038(a) 

of Title 26 of the United States Code. That section states, “After each matching payment period, 

the Commission shall conduct a thorough examination and audit of the qualified campaign 

expenses of every candidate and his authorized committees who received [matching] payments 

under section 9037.” Also, Section 9039(b) of the United States Code and Section 9038.1(a)(2) 

of the Commission’s Regulations state that the Commission may conduct other examinations and 

audits from time to time as it deems necessary. 

Scope of Audit 

Unless noted in the Committee Structure section below, this audit examined JSFP’s primary 

election activity only. The following areas were covered by this audit: 

1. The receipt of excessive contributions and loans. 

2. The receipt of contributions from prohibited sources. 

3. The receipt of transfers from other authorized committees. 

4. The disclosure of contributions and transfers received. 

5. The disclosure of disbursements, debts and obligations. 

6. The recordkeeping process and completeness of records. 

7. The consistency between reported figures and bank records. 

8. The accuracy of the Statement of Net Outstanding Campaign Obligations. 

9. The campaign’s compliance with spending limits. 

10. Other campaign operations necessary to the review. 

Committee Structure 

JSFP was the only campaign committee authorized by Jill Stein (the Candidate) for the 2016 

Presidential election and conducted primary, general and recount activity for the Candidate. 

JSFP opened six bank accounts: one checking and one savings account for each activity. JSFP 

deposited contributions received before the Candidate’s nomination into the primary checking 

account, and most contributions received after the nomination into the general checking account. 

JSFP received matching funds for its primary campaign. This audit covered JSFP’s primary 

election activity to determine if the expenses were qualified campaign expenses defrayed in the 

connection with the primary election.3

 

3

 Under Title 26, this audit included an examination of JSFP’s Statement of Net Outstanding Campaign Obligations 

based solely on JSFP’s primary election activity for the purpose of determining the extent to which the Candidate 

was entitled to primary matching funds (Finding 1). Due to the committee’s structure, this audit also covered a Title 

52 examination of JSFP’s overall consistency between reported figures and bank activity, which included general 

and recount activity. For clarification, the Audit staff has indicated in Finding 3 – Misstatement of Financial 

Activity, those transactions that were not related to primary election activity. 
 2 

Commission Guidance 

Request for Early Commission Consideration of a Legal Question 

Pursuant to the Commission’s “Policy Statement Establishing a Program for Requesting 

Consideration of Legal Questions by the Commission,” JSFP requested early consideration of 

two legal questions raised during the audit. The first question pertained to whether the 

Commission’s original determination of the Candidate’s date of ineligibility (DOI) was proper. 

The second question was whether committees should be permitted to incur winding down 

expenses and other primary expenses after the DOI if they are clearly incurred to improve 

compliance with existing laws and regulations or if they are clearly required in the course of 

seeking the qualification for the ballot in various states.4

The Commission concluded, by a vote of 4-0, to reaffirm JSFP’s original DOI as August 6, 

2016.5 (See Finding 1, p. 7.) 

Inventory of Campaign Records 

The Audit staff routinely conducts an inventory of campaign records before it begins audit 

fieldwork. JSFP’s records were materially complete when fieldwork commenced.6

 

 

4

 Although JSFP’s request purported to identify three separate questions for review, two of the questions raised the 

same essential issue, which is whether the Commission’s original DOI determination was proper. Therefore, those 

two questions were consolidated into a single question. 

5

 JSFP presented no argument in its Request for Consideration of a Legal Question regarding the second question, 

however, the response to this question is addressed directly in the Commission’s regulations. The regulations 

provide for the payment of winding down costs, i.e. costs associated with the termination of political activity, 

including compliance with statutory post-election requirements and other specifically defined administrative costs. 

11 CFR §§ 9034.4(a)(3) and 9034.11. Because the regulations directly address the payment of winding down costs, 

there was no need for the Commission to reach a determination on the second question in the request. 6

 The Audit staff encountered delays prior to fieldwork due to JSFP’s inability to timely provide complete 

computerized information. 
 3 

Part II 

Overview of Campaign 

Campaign Organization 

 

7

 On March 28, 2016, the Candidate submitted a signed letter (dated March 18, 2016 and subsequently revised on 

April 5, 2016), to the Commission seeking to become eligible to receive Presidential primary matching funds and 

agreeing that she and her authorized committee would comply with the conditions set forth in 11 CFR §9033.1(b). 

A threshold submission was submitted on March 28, 2016, and the Commission certified the Candidate as eligible to 

receive matching funds on April 13, 2016. The period during which the Candidate was eligible for matching funds 

ended on August 6, 2016, the Candidate’s DOI. 

8

 The audit covered the period from JSFP’s first bank deposit on January 17, 2015. The Audit staff also conducted 

limited reviews of receipts and expenditures after December 31, 2016, to determine whether the Candidate was 

eligible to receive additional matching funds. 

Important Dates 

 Date of Registration July 14, 2015 

 Eligibility Period7 April 13, 2016 – August 6, 2016 

 Audit Coverage8 January 17, 2015 – December 31, 2016 

Headquarters Lexington, Massachusetts 

Bank Information 

 Bank Depositories One 

 Bank Accounts Six (One checking and one savings account each 

for primary, general and recount activity) 

Treasurer 

 Treasurer When Audit Was Conducted Steven Welzer 

 Treasurer During Period Covered by Audit Steven Welzer 

Management Information 

 Attended Commission Campaign Finance 

Seminar 

No 

 Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 
 4 

Overview of Financial Activity 

(Audited Amounts)9

 

Cash-on-hand @ January 17, 2015 $ 0 

Receipts 

o Contributions from Individuals10 11,010,439 

o Matching Funds Received11 456,035 

o Loans Received 40,000 

o Offsets to Operating Expenditures 716,735 

Total Receipts $ 12,223,209

 

Disbursements 

o Operating Expenditures 11,885,379 

o Transfers to Other Authorized Committees 22,300 

o Fundraising Disbursements 15,156 

o Contribution Refunds 2,465

o Other Disbursements 250

Total Disbursements $ 11,925,550 

Cash-on-hand @ December 31, 2016 $ 297,659 

 

 

9

 These figures contain primary election, general election and recount activity. See Committee Structure on p. 1. 10 JSFP received approximately 50,924 contributions from 42,486 individuals totaling $2,135,681 for primary 

election activity. 

11 As of the Candidate’s DOI, August 6, 2016, JSFP had received matching funds totaling $456,036. JSFP received 

an additional $134,900 on January 18, 2017, for a total of $590,936.
 5

 

Part III 

Summaries 

Findings and Recommendations 

Finding 1. Net Outstanding Campaign Obligations - 

Surplus

The Audit staff’s review of JSFP’s financial activity through December 31, 2016, and 

estimated winding down costs indicated that the Candidate had a surplus of funds as of 

her DOI in the amount of $200,856. Of this surplus amount, JSFP is required to make a 

pro rata repayment of the $40,372. 

In JSFP’s initial Statement of Net Outstanding Campaign Obligations (NOCO) filed 

during the matching fund period, cash on hand was understated and both accounts 

payable and winding down expenses were overstated. As such, JSFP’s NOCO indicated 

an apparent deficit position and therefore eligible to receive matching funds. The Audit 

staff’s analysis of the NOCO, however, determined that surplus funds were received and 

the Candidate was not eligible for all of the matching funds she received. The 

Preliminary Audit Report recommended that JSFP provide evidence that the Candidate 

did not have surplus funds as of her DOI. 

In response to the Preliminary Audit Report recommendation, JSFP disagreed it was in a 

surplus position and stated if the disallowed ballot access costs and recently updated 

winding down estimates were considered, it would instead be in a deficit position and 

therefore not be required to make a repayment. JSFP provided documentation and an 

updated NOCO to support its position. Based on this documentation and JSFP’s 2017 

and 2018 reported activity on Schedule B (Itemized Disbursements), the Audit staff 

updated its NOCO to reflect increased ballot access costs incurred prior to DOI and 

increased winding down actual costs. These adjustments reduced the repayment amount, 

but the revised NOCO still reflected a surplus position. Therefore, the Audit staff 

recommends that the Commission make a determination that $40,372 is repayable to the 

United States Treasury. (For more detail, see p. 7.) 

Finding 2. Matching Funds Received in Excess of 

Entitlement

The Audit staff’s NOCO statement, as presented in Finding 1, indicated a surplus 

position as of August 6, 2016, the Candidate’s DOI. Therefore, JSFP was not entitled to 

the matching fund payment of $134,900 it subsequently received on January 18, 2017. 

The Preliminary Audit Report recommended that JSFP provide evidence that the 

Candidate did not have surplus funds as of her DOI. 

In response to the Preliminary Audit Report recommendation, JSFP provided 

documentation and an updated NOCO, and stated that it was entitled to all matching fund 

payments due to its increased winding down expenses, even if previously disallowed 

ballot access and other expenses were not considered. After the Audit staff incorporated 
 6

 

the expenses that were documented as pertaining to the Primary election into its revised 

NOCO, JSFP was still in a surplus position and therefore not entitled to the matching 

fund payment it received after the Candidate’s DOI. Therefore, the Audit staff 

recommends that the Commission make a determination that $134,900 is repayable to the 

United States Treasury. (For more detail, see p. 14.) 

Finding 3. Misstatement of Financial Activity

During audit fieldwork, a comparison of JSFP’s reported financial activity with its bank 

records revealed a misstatement of receipts and disbursements for 2015 and 2016 and a 

misstatement of ending cash in 2016. In 2015, JSFP understated its reported receipts and 

disbursements by $31,495 and $35,042 respectively; and in 2016, JSFP understated its 

reported receipts, disbursements and ending cash by $996,384, $800,310 and $192,527 

respectively. The Preliminary Audit Report recommended that JSFP amend its disclosure 

reports to correct the misstatements. 

In response to the Preliminary Audit Report recommendation, JSFP related it was in the 

process of making the necessary amendments to correct the misstatements but no reports 

were filed. (For more detail, see p. 15.) 

Finding 4. Disclosure of Debts and Obligations

During audit fieldwork, the Audit staff identified debts totaling $17,015 not disclosed on 

Schedule D-P (Debts and Obligations), as required. The Preliminary Audit Report 

recommended that JSFP amend its reports to disclose the outstanding debt. 

In response to the Preliminary Audit Report recommendation, JSFP related it was in the 

process of making the necessary amendments to correct the disclosure of debts and 

obligations but no reports were filed. (For more detail, see p. 18.) 

Summary of Amounts Owed to the United 

States Treasury 

Finding 1 

(p. 7) 

Pro-rata portion of the Surplus Matching Funds $ 40,372 

Finding 2 

(p. 14)

Matching Funds received in Excess of 

Entitlement 

$ 134,900 

 Total Due United States Treasury $ 175,272 

 
 7

 

Part IV 

Findings and Recommendations

Finding 1. Net Outstanding Campaign Obligations - 

Surplus 

Summary 

The Audit staff’s review of JSFP’s financial activity through December 31, 2016, and 

estimated winding down costs indicated that the Candidate had a surplus of funds as of 

her DOI in the amount of $200,856. Of this surplus amount, JSFP is required to make a 

pro rata repayment of the $40,372. 

In JSFP’s initial Statement of Net Outstanding Campaign Obligations (NOCO) filed 

during the matching fund period, cash on hand was understated and both accounts 

payable and winding down expenses were overstated. As such, JSFP’s NOCO indicated 

an apparent deficit position and therefore eligible to receive matching funds. The Audit 

staff’s analysis of the NOCO, however, determined that surplus funds were received and 

the Candidate was not eligible for all of the matching funds she received. The 

Preliminary Audit Report recommended that JSFP provide evidence that the Candidate 

did not have surplus funds as of her DOI. 

In response to the Preliminary Audit Report recommendation, JSFP disagreed it was in a 

surplus position and stated if the disallowed ballot access costs and recently updated 

winding down estimates were considered, it would instead be in a deficit position and 

therefore, not be required to make a repayment. JSFP provided documentation and an 

updated NOCO to support its position. Based on this documentation and JSFP’s 2017 

and 2018 reported activity on Schedule B (Itemized Disbursements), the Audit staff 

updated its NOCO to reflect increased ballot access costs incurred prior to DOI and 

increased winding down actual costs. These adjustments reduced the repayment amount, 

but the revised NOCO still reflected a surplus position. Therefore, the Audit staff 

recommends that the Commission make a determination that $40,372 is repayable to the 

United States Treasury. 

Legal Standard 

A. Net Outstanding Campaign Obligations (NOCO). Within 15 days after the 

candidate’s date of ineligibility (see definition below), the candidate must submit a 

statement of “net outstanding campaign obligations.” This statement must contain, 

among other things: 

 The total of all committee assets including cash-on-hand, amounts owed to the 

committee and capital assets listed at their fair market value; 

 The total of all outstanding obligations for qualified campaign expenses; and 

 An estimate of necessary winding-down costs. 11 CFR §9034.5(a). 

 
 8

 

B. Date of Ineligibility. The date of ineligibility is whichever of the following dates 

occurs first: 

 The day on which the candidate ceases to be active in more than one state; 

 The 30th day following the second consecutive primary in which the candidate 

receives less than 10 percent of the popular vote; 

 The end of the matching payment period, which is generally the day when the 

party nominates its candidate for the general election; or 

 In the case of a candidate whose party does not make its selection at a national 

convention, the last day of the last national convention held by a major party in 

the calendar year. 11 CFR §§9032.6 and 9033.5. 

C. Qualified Campaign Expense. Each of the following expenses is a qualified 

campaign expense. 

 An expense that is: 

o Incurred by or on behalf of the candidate (or his or her campaign) during the 

period beginning on the day the individual becomes a candidate and 

continuing through the last day of the candidate’s eligibility under 11 CFR 

§9033.5; 

o Made in connection with the candidate’s campaign for nomination; and 

o Not incurred or paid in violation of any federal law or the law of the state 

where the expense was incurred or paid. 11 CFR §9032.9. 

 An expense incurred for the purpose of determining whether an individual should 

 become a candidate, if that individual subsequently becomes a candidate, 

 regardless of when that expense is paid. 11 CFR §9034.4. 

 An expense associated with winding down the campaign and terminating political 

activity. 11 CFR §9034.4(a)(3). 

D. Value of Capital Assets. The fair market value of capital assets is 60% of the total 

original cost of the assets when acquired, except that assets that are received after the date 

of ineligibility must be valued at their fair market value on the date received. A 

candidate may claim a lower fair market value for a capital asset by listing the asset on 

the NOCO statement separately and demonstrating, through documentation, the lower 

fair market value. 11 CFR §9034.5(c)(1).

E. Winding Down Costs. A primary election candidate who runs in the general 

election must wait until 31 days after the general election before using any matching 

funds for winding down costs, regardless of whether the candidate receives matching 

funds for the general election. 

11 CFR §9034.11(d). 
 9

 

F. Documentation of Disbursements. Each candidate shall have the burden of proving 

that disbursements made by the candidate and/or her authorized committee are qualified 

campaign expenses. 11 CFR §9033.11. 

G. Surplus. The Commission may determine through audits and examinations that the 

candidate’s net outstanding campaign obligations, as defined in 11 CFR §9034.5, reflect 

a surplus. When a surplus is identified, the candidate shall, within 30 days of the 

ineligibility date, repay to the United States Treasury an amount which represents the 

amount of matching funds contained in the candidate’s surplus. The amount shall be an 

amount equal to that portion of the surplus which bears the same ratio to the total surplus 

that the total amount received by the candidate from the matching payment account bears 

to total deposits made to the candidate’s accounts. The Commission will provide the 

candidate with a written notice of its repayment determination. 

11 CFR §§9038.2(b)(1)(ii) and (c)(1) and 9038.3(c)(1). 

H. Entitlement to Matching Payments after Date of Ineligibility. If, on the date of 

ineligibility a candidate has net outstanding campaign obligations as defined under 11 

CFR §9034.5, that candidate may continue to receive matching payments for matchable 

contributions received and deposited on or before December 31st of the Presidential 

election year, provided that he or she still has net outstanding campaign debts on the day 

when the matching payments are made. 11 CFR §9034.1(b). 
 10

 

Facts and Analysis 

A. Facts 

The Candidate’s DOI was August 6, 2016. The Audit staff reviewed JSFP’s financial 

activity through December 31, 2016; analyzed actual and projected winding down 

costs;12 and prepared the NOCO that appears below. 

Jill Stein for President

Statement of Net Outstanding Campaign Obligations

As of August 6, 2016

As determined at August 31, 2018 

Assets

Cash in Bank $ 792,935 [a] 

Accounts Receivable 13,289 

Physical Assets @ 60% depreciation 4,200 

Total Assets $ 810,424

Liabilities

Accounts Payable for Qualified Campaign Expenses as of 8/6/16 $ (237,602) 

Loan Payable as of 8/6/2016 ( 40,000) 

Actual Winding Down Costs (12/9/16 – 8/31/18) (262,611) 

Estimated Winding Down Costs (9/1/18 – 7/31/2019) (_69,355) [b] 

Total Liabilities $ (609,568)

Net Outstanding Campaign Obligations –Surplus $ 200,856 

Footnotes to NOCO Statement: 

 [a] Amount includes contributions dated prior to DOI and deposited after DOI. 

 [b] Estimated winding down costs for future reportable periods only. This amount will be 

compared to actual winding down costs and will be adjusted accordingly. Estimated 

winding down presented in the preliminary audit report was reduced from $100,880 to 

$69,335 to reflect the remaining winding down period. 

 

 

12 The actual winding down costs were reviewed through August 31, 2018, the last date JSFP provided 

banking and disbursement documentation to support its actual winding down expenses. 
 11

 

i. Surplus Pro-Rata Repayment Calculation 

The Audit staff’s NOCO calculations indicated there were surplus funds of $200,856 

as of DOI. Of this amount, $40,372 ($200,856 x .201013) is the pro-rata portion of 

the surplus that is repayable to the United States Treasury. 

ii. NOCO Differences: The primary differences between JSFP’s NOCO and the 

NOCO prepared by the Audit staff are discussed below: 

a. Cash In Bank 

The primary difference between the assets section of the NOCO presented above 

and those prepared by JSFP is the cash in bank balance. JSFP understated cash by 

$313,079. Most of the understatement of cash represented funds received prior to 

the Candidate’s DOI, but deposited after, with a majority consisting of 

contributions less than $200 made by credit card. Further, a majority of these 

credit card contributions were included in JSFP’s receipts database as 

contributions made to the Primary election and were reported as unitemized 

contributions. The remaining difference pertained to outstanding disbursement 

checks that had not cleared the bank as of DOI that were not included in JSFP’s 

cash in bank calculation. The understatement of assets caused the NOCO 

statements to show a larger deficit and matching fund entitlement than was the 

case. 

 b. Accounts Payable for Qualified Campaign Expenses 

1. Ballot Access Petitioning Expenses

The primary difference between the accounts payable section of the 

NOCO presented on the previous page and those prepared by JSFP is with 

the amount of ballot access petitioning expenses.14 JSFP included all 

ballot access petitioning expenses, including those incurred after DOI, 

thus overstating the amount calculated by the Audit staff by $255,671.15 

As noted in the legal standards above, only expenses incurred on or before 

DOI can be considered qualified campaign expenses. Therefore, the Audit 

staff did not include ballot access petitioning expenses incurred after DOI 

in its calculation of the NOCO. Furthermore, in many instances, the 

incurrence dates of the ballot access petitioning expenses were not 

sufficiently documented by JSFP and JSFP made no additional 

documentation available. Due to the lack of documentation, the Audit 

staff also did not include these undocumented expenditures in its NOCO 

calculations. 

 

13 This figure (.2010), as calculated pursuant to 11 CFR §9038.3(c)(1), represents JSFP’s repayment ratio 

and was calculated by dividing the total matching funds received as of DOI ($456,035) by the adjusted total 

deposits made to the candidate’s accounts as of DOI ($2,269,118). Therefore, the repayment ratio was 

$456,035/$2,269,118 = 20.10% 

14 Ballot access petitioning is required for all states when a minor party candidate seeks to be included on 

the General election ballot for the state. Each state has unique petitioning requirements and cutoff dates, 

and some dates were subsequent to the Candidate’s DOI. 

15 The Audit staff’s review of all disbursements paid post DOI also resulted in the identification of 

additional expenses unrelated to ballot access that were not included in JSFP’s NOCO accounts payable 

section. 
 12

 

2. Winding Down Expenses 

The Audit staff’s initial calculation of actual winding down expenses 

excluded expenses that were not adequately documented by JSFP. As of 

the date of the PAR, JSFP had not provided banking and supporting 

disbursement documentation for winding down expenses after August 1, 

2017. Therefore, the winding down expenses for the months not 

documented were initially reflected on the NOCO as $0.16 Estimated 

monthly winding down expenses only include future reporting periods. 

JSFP’s NOCO also included winding down expenses that were incurred 

after DOI but before the end of the expenditure report period, December 

9, 2016, totaling $42,727. Since the Candidate participated in the 

General election, the Audit staff considered disbursements on or before 

December 9, 201617 to be expenses pertaining to the General election, in 

accordance with 11 CFR §§9002.12(a) and 9034.11(d), and therefore did 

not include them on the NOCO as winding down expenses for the 

Primary election. 

Both winding down expense adjustments discussed above reduce the 

amount of liabilities on the NOCO and therefore reduce the amount of the 

matching fund entitlement. 

B. Preliminary Audit Report & Audit Division Recommendation 

The Audit staff presented a preliminary NOCO statement and related work papers to the 

JSFP representative at the exit conference. The JSFP representative stated he would need 

to review the work papers to determine why all credit card contributions had not been 

included in the cash on hand in the NOCO. He also related he disagreed with how the 

ballot access petitioning costs were allocated on the NOCO and stated he based this on 

previous audit reports. The representative stated it was his understanding that all ballot 

access costs were Primary election expenses regardless of the date they were incurred. In 

response to the exit conference, the JSFP representative provided documentation to 

support that certain ballot access petitioning costs were incurred prior to DOI. 

Subsequent to the exit conference, JSFP requested early consideration of two legal 

questions raised during the audit. The first question pertained to whether the 

Commission’s original determination of the Candidate’s DOI was proper. The second 

question was whether committees should be permitted to incur winding down expenses 

and other primary expenses after the DOI if they are clearly incurred to improve 

compliance with existing laws and regulations or if they are clearly required in the course 

of seeking the qualification for the ballot in various states.18

 

16 As of the date of the PAR, the excluded months were August 2017 through July 2018. 

17 General election date = November 8, 2016 + 31 days = December 9, 2016. 

18 Although JSFP’s request purported to identify three separate questions for review, two of the questions 

raised the same essential issue, which is whether the Commission’s original DOI determination was proper. 

Therefore, those two questions were consolidated into a single question. 
 13

 

The Commission concluded, by a vote of 4-0, to reaffirm JSFP’s original DOI as August 

6, 2016. 19 

The Preliminary Audit Report recommended that JSFP provide evidence that the audited 

NOCO was not in a surplus position. Absent such evidence, the Audit staff stated it 

would recommend that the Commission make a determination that $66,196, representing 

the pro-rata portion of the surplus, was repayable to the United States Treasury. 

C. Committee Response to Preliminary Audit Report 

In response to the Preliminary Audit Report recommendation, JSFP continued to 

maintain its position that ballot access laws in each state should dictate which expenses 

qualify as qualified campaign expenses for the Primary election, and not necessarily the 

candidate’s DOI. The Commission, however, concluded by a vote of 4-0 that JSFP’s 

DOI was August 6, 2016. As noted in the legal standards above, only expenses incurred 

on or before DOI can be considered qualified campaign expenses. Therefore, the Audit 

staff did not include ballot access petitioning expenses incurred after DOI in its 

calculation of the NOCO. 

JSFP also provided documentation and an updated NOCO, which, when compared to its 

initial NOCO, reflected an overall increase in total assets of $332,051, the majority of 

which included an increase in cash on hand of $314,561. The Audit staff concurred with 

$313,079, with the difference of $1,482 being JSFP’s overstatement of cash on hand. 

JSFP’s updated NOCO also included an overall increase in total obligations of $294,820, 

all of which pertained to “estimated winding down expenses” that JSFP’s NOCO 

reflected as $516,789. JSFP did not provide a listing to support all of the winding down 

expenses that justify this increase. JSFP provided bank statements for Primary and 

General election bank accounts only, some check copies written on Primary, General and 

Recount bank accounts, and accounting and payroll listings of selected expenses paid in 

2017 and 2018. However, none of this documentation included election designation 

information. This was important because JSFP paid certain winding down expenses, 

such as salary, that were fully documented with payroll processing reports but those 

reports did not include the amount allocated to the Primary election for each pay-period 

and/or employee. To supplement the Committee’s documentation, the Audit staff used 

the reports filed by JSFP with the Commission to calculate the amount allocated by the 

Committee to the Primary election. The Audit staff’s analysis resulted in additional 

actual winding down expenses of $123,967 and a reduction in the estimated winding 

down expenses of $31,525. 

In addition to the analysis of winding down expenses, the Audit staff also reviewed 

invoices that were previously submitted and identified additional accounts payable 

expenses totaling $36,035. 

 

19 JSFP presented no argument in its Request for Consideration of a Legal Question regarding the second 

question, however, the response to this question is addressed directly in the Commission’s regulations. The 

regulations provide for the payment of winding down costs, i.e. costs associated with the termination of 

political activity, including compliance with statutory post-election requirements and other specifically 

defined administrative costs. 11 CFR §§ 9034.4(a)(3) and 9034.11. Because the regulations directly 

address the payment of winding down costs, there was no need for the Commission to reach a 

determination on the second question in the request. 
 14

 

Although the Audit staff could not confirm JSFP’s total obligations increase, it did verify 

additional accounts payable based on invoices, totaling $36,035, additional actual 

winding down expenses totaling $123,967, and a reduction in estimated winding down 

expenses of $31,525, for a net increase in obligations of $128,477 ($36,035 + 123,967 – 

31,525), and updated the NOCO above accordingly. 

The updated NOCO reduced the amount of the surplus from $329,333 to $200,856 

however, a pro-rata repayment of the surplus was still required. Therefore, the Audit 

staff recommends that the Commission make a determination that $40,372 is repayable to 

the United States Treasury. 

Finding 2. Matching Funds Received in Excess of 

Entitlement 

Summary 

The Audit staff’s NOCO statement, as presented in Finding 1, indicated a surplus 

position as of August 6, 2016, the Candidate’s DOI. Therefore, JSFP was not entitled to 

the matching fund payment of $134,900 it subsequently received on January 18, 2017. 

The Preliminary Audit Report recommended that JSFP provide evidence that the 

Candidate did not have surplus funds as of her DOI. 

In response to the Preliminary Audit Report recommendation, JSFP provided 

documentation and an updated NOCO, and stated that it was entitled to all matching fund 

payments due to its increased winding down expenses, even if previously disallowed 

ballot access and other expenses were not considered. After the Audit staff incorporated 

the expenses that were documented as pertaining to the Primary election into its revised 

NOCO, JSFP was still in a surplus position and therefore not entitled to the matching 

fund payment it received after the Candidate’s DOI. Therefore, the Audit staff 

recommends that the Commission make a determination that $134,900 is repayable to the 

United States Treasury. 

Legal Standard 

A. Entitlement to Matching Payments after Date of Ineligibility. If, on the date of 

ineligibility a candidate has net outstanding campaign obligations as defined under 11 

CFR §9034.5, that candidate may continue to receive matching payments for matchable 

contributions received and deposited on or before December 31st of the Presidential 

election year, provided that he or she still has net outstanding campaign debts on the day 

when the matching payments are made. 11 CFR §9034.1(b). 

B. Repayments. The Commission may determine that certain portions of the payments 

made to a candidate from the matching payment account were in excess of the aggregate 

amount of payments to which such candidate was entitled. Examples of such excessive 

payments include, but are not limited to, payments made to the candidate after the 

candidate’s date of ineligibility where it is later determined that the candidate had no net 

outstanding obligations. 11 CFR §§9034.5 and 9038.2 (b)(1)(i). 
 15

 

Facts and Analysis 

A. Facts 

On January 18, 2017, JSFP received its only post-DOI matching fund payment of 

$134,900. The Audit staff’s NOCO calculations indicated, however, that JSFP was in a 

surplus position as of DOI and was not entitled to receive additional matching funds (see 

Finding 1, p. 9). Therefore, JSFP is required to make a dollar for dollar repayment of this 

entire matching fund payment to the United States Treasury. 

B. Preliminary Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to the JSFP representative at the exit conference in 

conjunction with the presentation of the audit calculated NOCO discussed in Finding 1 

above. JSFP’s response pertaining to receipt of matching funds in excess of entitlement 

is also detailed in Finding 1 above. 

The Preliminary Audit Report recommended that JSFP provide evidence that it did not 

receive matching funds in excess of entitlement. Absent such evidence, the Audit staff 

stated it would recommend that the Commission make a determination that $134,900 was 

repayable to the United States Treasury. 

C. Committee Response to Preliminary Audit Report 

In response to the Preliminary Audit Report recommendation, JSFP provided 

documentation and an updated NOCO, and stated that even if all ballot access and other 

previously disallowed expenses were not considered primary election expenses, JSFP 

was still entitled to all matching fund payments it received due to its updated projections 

for winding down expenses. The Audit staff disagrees. As discussed in Finding 1 above, 

after the Audit staff incorporated the expenses that could be documented as pertaining to 

the Primary election into its revised NOCO, JSFP was still in a surplus position and 

therefore not entitled to the matching fund payment it received after the Candidate’s DOI. 

The Audit staff recommends that the Commission make a determination that $134,900 is 

repayable to the United States Treasury. 

 

Finding 3. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of JSFP’s reported financial activity with its bank 

records revealed a misstatement of receipts and disbursements for 2015 and 2016 and a 

misstatement of ending cash in 2016. In 2015, JSFP understated its reported receipts and 

disbursements by $31,495 and $35,042 respectively; and in 2016, JSFP understated its 

reported receipts, disbursements and ending cash by $996,384, $800,310 and $192,527 

respectively. The Preliminary Audit Report recommended that JSFP amend its disclosure 

reports to correct the misstatements. 

In response to the Preliminary Audit Report recommendation, JSFP related it was in the 

process of making the necessary amendments to correct the misstatements but no reports 

were filed. 
 16

 

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; 

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

 and certain transactions that require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 52 U.S.C. §30104(b)(l), (2), (3), (4) and (5). 

Facts and Analysis 

A. Facts 

As part of audit fieldwork, the Audit staff reconciled JSFP’s reported activity20 with its 

bank records for calendar years 2015 and 2016. The reconciliation revealed that JSFP 

misstated its receipts and disbursements for both years. The following charts outline the 

discrepancies between JSFP’s disclosure reports and its bank records. 

2015 Reported Activity to Bank Activity 

 Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1, 2015 

$0 $0 $0 

Receipts $244,196 $275,691 $31,495 

Understated 

Disbursements $221,985 $257,027 $35,042 

Understated 

Ending Cash Balance @ 

December 31, 2015 

$22,211 $18,664 $3,547 

Overstated 

The understatement of receipts resulted from the following: 

 Contributions from individuals not on reports + $43,877 

 Unexplained difference - 12,382 

Net Understatement of Receipts + $31,495 

 

20 Due to JSFP’s consolidated reporting as one entity for primary, general and recount activity; the 

incorrect identification of election designations on the reports; the missing election designation information 

in some of the database records; and the large volume of transactions not required to be itemized, it was 

impossible for the Audit staff to exclude the general and recount activity from this reconciliation, especially 

during the post DOI period, which was August 7, 2016 through December 31, 2016. 
 17

 

The understatement of disbursements resulted from the following: 

 Payments for salaries and wages not reported + $45,364 

 Disbursements reported but did not clear the bank - 14,903 

 Credit card fees not reported + 4,455 

 Miscellaneous disbursements not reported + 126 

Net Understatement of Disbursements + $35,042 

The $3,547 overstatement of the ending cash balance resulted from the misstatements 

described above. 

2016 Reported Activity to Bank Activity21

 Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1, 2016 

$22,211 $18,664 $3,547 

Receipts $10,951,133 $11,947,517 $996,38422

Understated 

Disbursements $10,868,212 $11,668,522 $800,31023

Understated 

Ending Cash Balance @ 

December 31, 2016 

$105,132 $297,659 $192,527 

Understated 

The understatement of receipts resulted from the following: 

 Contributions from individuals not reported + $565,893 

 Contributions from individuals reported, not supported by 

bank deposit - 128,420 

 Offsets to operating disbursements not reported + 6,328 

 In-kind contributions not reported as a receipt + 247 

 Interest Income underreported + 25 

 Unexplained difference24 + 552,311 

Net Understatement of Receipts $996,384 

 

21 This activity represents primary election, general election and recount activity. See Committee 

Structure, p. 1. 

22 General election and recount activity represents $815,959, or 82% of the understated receipts totals. 23 General election and recount activity represents $688,355 or 86% of the understated disbursement totals. 24 Due to the volume of contributions and an incomplete receipts database from JSFP, the specific 

individual contributors could not be identified; however, it appeared that the majority of this unexplained 

difference pertained to deposits in the bank made after the general election. 
 18

 

The understatement of disbursements resulted from the following: 

 Credit card fees not reported + $451,344 

 Disbursements to vendors not reported + 365,676 

 Disbursements reported but did not clear the bank - 74,774 

 Disbursements directly from Paypal receipts, not reported + 35,762 

 Payments for salaries and wages, not reported + 27,000 

 In-kind contributions not reported as disbursement + 247 

 Unexplained difference - 4,945 

Net Understatement of Disbursements $800,310 

The $192,527 understatement of the ending cash balance resulted from the misstatements 

described above. 

B. Preliminary Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to the JSFP representative at the exit conference 

along with schedules detailing the discrepancies. During the exit conference, the JSFP 

representative stated he had no explanation for the discrepancies but would research and 

determine if there was a pattern that would explain the cause. In its response to the exit 

conference, JSFP made no comment on this finding. 

The Preliminary Audit Report recommended that JSFP amend its disclosure reports to 

correct the misstatements. 

C. Committee Response to Preliminary Audit Report 

In response to the Preliminary Audit Report recommendation, JSFP related it was in the 

process of making the necessary amendments to correct the misstatements but no reports 

were filed. 

Finding 4. Disclosure of Debts and Obligations 

Summary 

During audit fieldwork, the Audit staff identified debts totaling $17,015 not disclosed on 

Schedule D-P (Debts and Obligations), as required. The Preliminary Audit Report 

recommended that JSFP amend its reports to disclose the outstanding debt. 

In response to the Preliminary Audit Report recommendation, JSFP related it was in the 

process of making the necessary amendments to correct the disclosure of debts and 

obligations but no reports were filed. 

Legal Standard 

A. Continuous Reporting Required. An authorized committee must disclose the 

amount and nature of outstanding debts and obligations until those debts are 

extinguished. 52 U.S.C. §30104(b)(8) and 11 CFR §§104.3(d) and 104.11(a). 

 
 19

 

B. Separate Schedules. An authorized committee must file separate schedules for debts 

owed by and to the committee with a statement explaining the circumstances and 

conditions under which each debt and obligation was incurred or extinguished. 

11 CFR §104.11(a).

C. Itemizing Debts and Obligations. 

 Once it has been outstanding 60 days from the date incurred, a debt of $500 or 

less must be reported on the next regularly scheduled report. 

 A debt exceeding $500 must be disclosed in the report that covers the date on 

which the debt was incurred, except reoccurring administrative expenses (such as 

rent) shall not be reported as a debt before the payment due date. 

11 CFR §104.11(b). 

D. Disputed Debts. A disputed debt is a bona fide disagreement between the creditor 

and the committee as to the existence of a debt or the amount owed by the committee. 

Until the creditor and committee resolve the dispute (assuming the creditor did provide 

something of value), the committee must disclose: 

 The amount the committee admits it owes; 

 The amount the creditor claims is owed; and 

 Any amounts the committee has paid the creditor. 11 CFR §116.10. 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff used the available disbursement records to 

reconcile the accounts of JSFP’s largest primary election vendors, including accounts 

payable expenses for the NOCO. The Audit staff identified debts owed to these vendors 

totaling $17,015 that were not disclosed on Schedule D-P, as required. For one 

transaction totaling $13,114, the majority of the error pertained to the disputed debt with 

one advertiser that was initially invoiced to JSFP for services in August 2016 and was 

ultimately paid in January 2017. During audit fieldwork, a JSFP representative related 

the amount of this invoice had been in dispute, but agreed that this debt should have been 

reported until the final invoice amount was negotiated and paid. 

B. Preliminary Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to the JSFP representative at the exit conference and 

provided schedules detailing the unreported debts for each relevant reporting period. 

This matter was discussed with the JSFP representative during fieldwork and at the exit 

conference. The representative stated he was familiar with the matter and understood the 

finding. In its response to the exit conference, JSFP made no comment on this finding. 

The Preliminary Audit Report recommended that JSFP provide documentation 

demonstrating that the amount owed of $17,015 did not require reporting as debt on 

Schedule D-P. Absent such documentation, the Preliminary Audit Report recommended 

that JSFP amend its reports to disclose the outstanding debt and continue to disclose it 

until extinguished. 
 20

 

C. Committee Response to Preliminary Audit Report 

In response to the Preliminary Audit Report recommendation, JSFP related it was in the 

process of making the necessary amendments to correct the disclosure of debts and 

obligations but no reports were filed.