FEDERAL ELECTION COMMISSION 

WASHINGTON, O.C 20463 

December 22,2014 

MEMORANDUM 

To: The Commission 

Through: Alec Palmer 

Staff Director 

From: Patricia C. Orrock 

Chief Compliance Officer 

Thomas E. HintermisteT"^ 

Assistant Staff Director 

Audit Division 

Kendrick Smr 

Audit Manager' 

Zuzana 0. Pacious 

Audit Manager ^ 

By: ^ Rickida Morcomi 

Lead Auditor 

Subject: Audit Division Recommendation Memorandum on the Democratic Party of 

Wisconsin (DPW) (A12-04) 

Pursuant to Commission Directive No. 70 (EEC Directive on Processing Audit Rq)orts), 

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

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

this memorandum and concurs with the recommendations. 

Finding 1. Misstatement of Financial Activity 

The Audit staff determined that, in its 2011 disclosure reports, DPW understated 

its receipts by $169,196 and understated its disbursements by $184,702. In its 

2012 disclosure reports, DPW overstated its receipts by $402,707 and overstated 

its disbursements by $381,326. In response to the Interim Audit Report 

recommendation, DPW filed amended disclosure rqjorts for 2011 and 2012 that 

materially corrected the misstatement of receipts and disbursements. DPW had no 

additional comments in response to the DEAR. 

The Audit staff recommends that the Commission find that DPW misstated its 

financial activity for calendar years 2011 and 2012. 
Finding 2. Recordkeeping for Employees 

For the period covered by the audit, DPW did not maintain any monthly payroll 

logs or equivalent records, as required, to document the percentage of time each 

employee spent in connection with a federal election. For 2011 and 2012, DPW 

did not maintain monthly logs for $3,627,262 in payroll. This amount includes 

payroll paid to DPW employees as follows. 

A. Employees reported on Schedule H4 (Payments for Allocable Expenses) 

and paid with a mixture of federal and non-federal iunds during the same 

month (totaling $2,192,SS4). 

B. Employees reported on Schedule H4 and/or Schedule B (Itemized 

Disbursements) and also paid with both a mixture of federal and nonfederal funds and exclusively non-federal funds during the same month 

(totaling $28,972); and 

C. Employees paid exclusively with non-federal funds in a given month and 

not reported by DPW (totaling $1,405,736). 

In response to the Interim Audit Report recoirunendation, DPW developed a webbased system for employees to track time associated with federal election activity. 

DPW had no additional comments in response to the DFAR. 

The Audit staff recommends that the Commission find that DPW failed to 

maintain monthly payroll logs totaling $3,627,262, as required, to document the 

percentage of time each employee spent in coimection with a federal election. 

DPW did not request an audit hearing. 

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

30 days of the Commission's vote. 

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

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

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

Should you have any questions, please contact Rickida Morcomb or Kendrick Smith at 

694-1200. 

Attachment: 

Draft Final Audit Report of the Audit Division on the Democratic Party of Wisconsin 

cc: Office of General Counsel 
• * "r,i~Vwrf. 

Draft Final Audit Report of the 

Audit Division on the 

Democratic Party of Wisconsin 

(January 1, 2011 - December 31, 2012) 

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 notto h=:«-j :i.c: 

the threshold 

requirements foi. 

substantial complia-..-. 

with theg^lfiE^^e au( 

the 

prohibr 

disclosure'^ 

of the Act. 

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 Commi^e (p. 2) 

The Democratic Party o^^^nsin is a state party committee 

headquartered in Ma^^^^isconsin. For more information, 

the chart on the Coj^^^^^anization, p. 2. 

Financt^I Activity (p. 2) 

• Receipts' ... 

o Contrib^ ' dividuals 

< . ontribu ' >litical 

Ltedand 

senditures 

. ContftMions to Other Political 

- ommittees 

• :ansfers to Affiliated and Other 

'Political Committees 

o Federal Election Activity 

o Other Disbursements 

Total Disbursements 

$ 6.744,785 

2,692,509 

8,676,624 

1,400,151 

484,290 

S 19,998,359 

$ 11,536,529 

25,500 

51,261 

7,991,072 

159,088 

$ 19,763,450 

Findings and Recommendations (p-3) 

• Misstatement of Financial Activity (Finding 1) 

• Recordkeeping for Employees (Finding 2) 

' On September 1,2014, the Federal Election Campaign Act of 1971, as amended fthe Act"), was 

transferred from Title 2 of the United States Code to the new Title 52 of the United States Code. 

* 52 U.S.C. §30111(b) (formerly 2 U.S.C. §438(b)). . 
Draft Final Audit Report of the 

Audit Division on the 

Democratic Party of Wisconsin 

(January 1, 2011 - December 31, 2012) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 

Scope of Audit 

Commission Guidance 

Part II. Overview of Committee 

Committee Organization 

Overview of Financial Activity 

2 

2 

Part ni. Summaries 

Findings and Recommendations 

Part IV. Findings and Recommcndati 

Finding 1. Misstatement of Financial Ac 

Finding 2. Recordkeeping f}-:! :*.-tyees 

4 

7 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Democratic Party of Wisconsin (DPW), 

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) (formerly 2 

U.S.C. §438(b)), which permits the Commission to con 

investigations of any political committee that is require 

§30104 (formerly 2 U.S.C. §434). Prior to cond 

the Commission must perform an internal review 

to determine whether die reports filed by a paitieii 

requirements for substantial compliance wl-'. 

U.S.C. §438(b)). 

Scope of Audit 

Following Commission-approvi 

factors and as a result, this audi 

1. the disclosure of individual 

2. :... .. • 

3. the disclosure of 

4. theconsi; 

5. the compli 

6. other commi 

Commission Guidance 

its and field 

I report under 52 U.S.C. 

; under this subsection, 

1 by selected committees 

meet the threshold 

52U.s:^« •- 11(b) (formerly 2 

•• - .p;.".» 

• evaluated vsu^^ risk 

Igd name of employer; 

[.-federal accounts; ) '• .•view. 

it for Early ( iiiiiiiiiN^iiui ( iiiiMili-r.iiiiiii nf a Legal Question 

I the Coi 

lofLc • U'" 

unaffiliat^^fo Di'".'- _ 

audits coveriiii^i^ie 2010 el 

monthly time loM^der 11 

percent 

- h > •statement Establishing a Program for Requesting 

—% Commission," several state party committees 

- y . onsideration of a legal question raised during 

cycle. Specifically, the Commission addressed whether 

§106.7(d)(l) were required for employees paid with 100 

The Commission cone .•:•.• by a vote of 5-1, that 11 CFR §106.7(d)(l) does require 

committees to keep a monthly log for employees paid exclusively wifo federal fbnds. 

Exercising its prosecutorial discretion, however, foe Commission decided it will not 

pursue recordkeeping violations for foe failure to keep time logs or to provide affidavits 

to account for employee salaries paid with 100 percent federal funds and reported as 

such. The Audit staff informed DPW representatives of foe payroll log requirement and 

of foe Commission's decision not to pursue recordkeeping violations for f^lure to keep 

payroll logs for s^aries paid and correctly reported as 100 percent federal. This audit 

report does not include any findings or recommendations with respect to DPW employees 

paid with 100 percent federal funds and reported as such. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration April 21.1975 

• Audit Coverage Ja . 'J. -December31,2012 

Headquarters M ' - -c msin 

Bank Information 

• Bank Depositories »l.! -

• Bank Accounts • i-.:;- vj' Non-federal 

Treasurer 

• Treasurer When Audit Was Conducted .haelF. Child k 

• Treasurer During Period Covered by Audit'^ ;hilders 

Management Information 

• Attended Commission Campaigh i : •! 

Seminar 

• Who Handled Accounting and 

Recordkeeping Tasks 

i'-i:.; >;=! 

ervi^ of ^inancial^ctivity 

(Audited Amounts) 

Cash-on-i 

Receipt 

laiiiiiir 21111 53,631 

u i.i v 

o Contritions from ^es 2,692,509 

o Transfe^.- - ^fTiliatedl Dther^^tical 

Committed> 8,676,624 

o Transfers fi - . i^qp-federi ^ counts 1,400,151 

o Other Receipts 484,290 

Total Receipts ' S 19,998,359 

Disbursements 

o Operating Expenditures 11,536,529 

o Contributions to Other Political Committees 25,500 

o Transfers to Afdliated and Other Political 

Committees 51,261 

o Federal Election Activity 7,991,072 

o Other Disbursements 159,088 

Total Disbursements S 19,763,450 

Cash-on-hand @ December 31,2012 S 288,540 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of DPW's reported financial activity with bank 

records revealed a misstatement of receipts and disbursem||^for 2011 and 2012. For 

2011, DPW understated its receipts by $169,196 and i^^^ements by $184,702. In 

2012, DPW overstated its receipts by $402,707 and itg^^rsements by $381,326. In 

response to the Interim Audit Report recommendaj^i^^^^iunended its disclosure 

reports to materially correct the misstatement> :.iUtfl^^ove.^ 

(For more detail, see p. 4.) 

Finding 2. Recordkeeping for Employees 

During audit fieldwork, the Audit staff de'::;;-i!i^..th.!- did not mag^lpn any 

monthly payroll logs, as required|te..document .ge of time eacl^i^lployee 

spent in connection with a feder^^^^. For 20W'012, the Audit st&identified 

payments to DPW employees tot^i1^^262, fo: -.il-w)! DPW did not maintain 

monthly payroll logs. This consist^^ $1^^^ ~ ^ i ^.payroll was allocated with 

federal and non-; 

federal. Inrespoi 

the need to im] 

developed a web-i 

election activity. (F< 

:s 

pay^^was exclusively nonitm, DPW acknowledged 

iil^lQgs. As a result, DPW 

track time associated with federal 
•-"I.*.;. 

PartlV 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of DPW's reported financial activity with bank 

records revealed a misstatement of receipts and disbursements for 2011 and 2012. For 

2011, DPW understated its receipts by $169,196 and its di^^sements by $184,702. In 

2012, DPW overstated its receipts by $402,707 and its^^^ements by $381,326. In 

response to the Interim Audit Report recommendatios^^^ amended its disclosure 

reports to materially correct the misstatements i 

Legal Standard 

Contents of Reports. Each report must 

• the amount of cash-on-hand at the begi 

• the total amount of receipts for the repo 

• the total amount of disbursep:iM • 1 --! he 

and 

• certain transactions that requ > .• 

Schedule B (Itemized Disbui •-

(formerly 2 U.S C ' I - i 

Facts and Ai^^is 

A. Facts 

As part:Sf^^t:|iiPld^ 

wit 

!:•• -•••. » 3d DPW's reported financial activity 

;;! .• • ^l^lciliation determined that DPW 

7 -2012. The following charts outline the 

reports and its bank records, and the succeeding 

occurred. 

and end of the repoi1^j|j^od; 

I-.: -^^^or the caleimi|^ear; 

s ;:;M6d and for the c^^dar year; 

(Itemized Receipts) or 

1). (2). (3). (4) and (5) 

1 receipts i 

discifff^npies betweeni 

paragra^jp^plain why 1 

2011 Cornmee Acti>1t\-

Reported Bank Records Discrepancy 

Beginning Cash"B^|fc:'e ^ 

January 1.2011 

$56,862 $53,631 $3,231 

Overstated 

Receipts $3,758,853 $3,928,049 $169,196 

Understated 

Disbursements $3,497,621 $3,682,323 $184,702 

Understated 

Ending Cash Balance @ 

December 31,2011 

$316,089" $299,357 $16,732 

Overstated 

' DPW miscalculated its ending cash balance. It should have been S318,094 (a difference of S2,00S). 

Using the correct ending cash balance (S318,094), the discrepancy is SI8,737. 
The beginning cash balance was overstated by $3,231 and is unexplained, but likely 

resulted from prior-period discrepancies. 

The understatement of receipts resulted from the following: 

• Transfers from non-federal accounts, not reported 

• In-kind contributions, not reported as receipts 

Vendor refrmd, not reported 

Vendor refunds reported as negatives 

Interest, not reported 

Political committee and individual contributions, 

not reported 

Reported refunds and contributions not supr-'r:w' a credit 

or deposit ^ 

Unexplained diffierences ^ 

Net Understatement of Receipts 

The understatement of disbursements i-::i the following: 

In-kind contributions, not reported as.: 

Vendor refunds reported 

Ti^sfers to non-federal 

Disbursements and fees. 

Reported disbursements 

Vendor fee-, .-•jg^^.orted 

Unexplainji!..:^^!.. • 

Net Und^«iHtemeiii nf IHsbu: 

gativet" 

notrepi "e.: 

I» •. hec^% 

+ $35,130 

+ 2,565 

H- 9,198 

+ 57,545 

+ 145 

+ 73,851 

• 9,260 

-1- 22 

+ .S:i69.196 

$2,565 

J 57,545 

-i- 15,119 

+ 111,793 

- 7,317 

+ 4,451 

+ 546 

ii-nN 

The $16,7320 

descr 

. -11 

+ 

resulted from the misstatements 

ical discrepancy in calculating the 

2III2 f'>iiimittee Aiiitiiy ^ 

•-S Reported Bank Records Discrepancy 

Begin ^^sh Bali.: I 

@ January'ti^l 2 | 

$316,089 $299,357 $16,732 

Overstated 

Receipts ^ $16,473,017 $16,070,310 $402,707 

Overstated 

Disbursements $16,462,453 $16,081,127 $381,326 

Overstated 

Ending Cash Balance @ 

December 31,2012 

$290,921' $288,540 $2,381 

Overstated 

* DPW reported vendor refunds as negative entries on Scheduie B Gtemized Disbursements). Unless the 

. refund is for aiiocable federal and non-federai expenditures or aiiocabie federai and Levin expenditures, 

the refund should be reported as an ohset to operating expenditures on Scheduie A (Itemized Receipts). 

* DPW miscalculated its ending cash balance. It should have been S326,6S4 (a difiermce of S3S,733). 

Using the correct ending cash balance (S326,6S4), the discrepancy is $38,114. 
The overstatement of receipts resulted from the following: 

• Vendor refunds reported as negatives 

• In-kind contributions, not reported as receipts 

• Contribution from a political committee, not reported 

• Transfers from non-federal accounts, not r^orted 

• Transfers fh)m the National Party, not reported 

• Incorrectly disclosed transfers from non-federal accounts 

• Contributions from joint fundraisers reported twice 

• Unexplained differences 

Net Overstatement of Receipts 

+ 

+ 

+ 

+ 

+ 

$15,312 

9,186 

1,000 

22,310 

31,270 

43,160 

457,814 

19,189 

s;4n2.707 

Regarding the $457,814 in contributions from joint flra^^'ers reported twice, the Audit 

staff noted the following. In its October 2012 moi{;^^$^^, DPW correctly reported 

transfers from two joint fundraiser representativ^.'^^chedn^^ (Itemized Receipts). 

DPW also reported the contributions from th^f^iViduals recel^^at these joint 

fimdraising events. However, DPW should^y'have reported ^^^^butions from the 

individuals as memo entries. As a result (^^^rting boA the trans^^^total 

contributions received from the joint fundrai^^nd eac^M the contrn^^ms from the 

individuals, DPW overstated the . ipts it rece^i. • .fpese joint fund^^ing events. 

The overstatement of disbursen? •VL -ig: 

Vendor refunds reported 

Transfers tc r. j.-:=l accoi 

In-kind 

Net l)i*liiii •cmeiiis ^ 

+ 

+ 

+ 

$15,312 

27,179 

9,186 

514,424 

81,421 

.M81.326 

icate rep^^^ti^ > !• ::nts, the Audit staff noted the 

a smj^yendor tl&^i^oduced mailers for DPW. Also, all three 

ents^li^ reported in the 2012 Pre-General report. 

The $2,381^ 

described abd' 

ending cash bali 

endiii^' cash balance resulted from the misstatements 

a $35,733 mathematical discrepancy in calculating the 

B. Interim Audit Ki-|iiii i iV Vudit Division Recommendation 

The Audit staff discussed'the misstatement of disbursements with DPW representatives at 

the exit conference. DPW representatives asked questions for clarification and said they 

would respond after having time to thoughtfully review each issue. The Audit staff 

provided work papers detailing the misstatement of receipts to DPW representatives after 

the exit conference. DPW did not provide a response to either the disbursements or 

receipts misstatements. 

The Interim Audit Report recommended that DPW amend its disclosure reports to correct 

the misstatements not^ above and reconcile the cash balance on its most recent report to 

identify any subsequent discrepancies that could affect the recommended adjustments. 
The Interim Audit Report further recommended that DPW adjust the cash balance as 

necessary on its most recent disclosure report, noting that the adjustment was the result of 

prior-period audit adjustments. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, DPW amended the disclosure 

reports to materially correct the misstatements. 

Counsel explained that while DPW does not contest the discrepanies identified by the 

auditors as part of the misstatement finding, the nature of these discrepancies in many 

cases involved the form of the disclosure provided, not i1 

specifically commented on the recommended repoi 

concerning vendor refunds and joint fimdraising 

reported vendor refunds as negative entries on Scl 

instead of as offsets to operating expendituries^^,chedules 

recommended by the Audit staff. With resp^pf^orting adji 

Counsel 

ents of the Audit staff 

For example, DPW 

ized Disbursements) 

d Receipts) as 

for joint 

fimdraising contributions. Counsel stated ^^Sie error in reportingi^^med because the 

wrong box was selected in the campaign fi^^ reporting^flware prepare its 

reports. Counsel further added that these conm^pny^preported tol^^ommission 

on a timely, individualized basi^ ?.-•:f its cash p^$^^as incorrect du^ 

reporting error. 

In response, the Audit staff woul.. 

noted above are basi 

;jCounbthati 

transactions is si 

Commission's i 

accurate. DPW's i 

(d)i 

I. -

I.-

•e'. 

If 

for the activity 

financial 

reports. However, the 

disclosure reports to be 

in inaccuracies in total receipts, total 

. §30104(b)(l). (2), (4)® and 11 CFR 

amount of beginning cash-on-hand, 

its, as well as the total amount of 

catergories. Therefore, the overall 

';pes of receipt and disbursements are significant 

lless of 

ions ima||;:ll CFR 

1 of dMbsure 

•• -.-r 52 

The Audit si •' . ^es that refunds and the joint fundraiser receipts were included 

inDPW'soi _ - l^^losi^^ports. However, because the transactions were either 

reported tvrice or re^^^Pnegative entries, DPW's receipt, disbursement and cash 

brdances wore misstat^^^ materially correct these misstatements, DPW filed amended 

disclosure reports for 2011 and 2012. 

I Finding 2. Recordkeeping for Employees 

Summary 

During audit fieldwork, the Audit staff determined that DPW did not maintain any 

monthly payroll logs, as required, to document the percentage of time each employee 

Formerly 2 U.S.C. §434(b)(l). (2) and (4). 
8 

spent in connection with a federal election. For 2011 and 2012, the Audit staff identified 

payments to DPW employees totaling $3,627,262, for which DPW did not maintain 

monthly payroll logs. This consisted of S2,192,SS4, for which payroll was allocated with 

federal and non-federal funds, and $1,434,708, for which payroll was exclusively nonfederal. In response to the Interim Audit Report recommen^tion, DPW acknowledged 

the need to improve its system of maintaining monthly time logs. As a result, DPW 

developed a web-based system for employees to track time associated with federal 

election activity. 

Legal Standard 

Maintenance of Monthly Logs. Party committees must 

percentage of time each employee spends in coi 

Allocations of salaries, wages, and fringe benefits 

• employees who spend 25 percent or less p: 

month on federal election activities mi 

or be allocated as administrative co 

employees who spend more than 

month on federal election activities 

employees who spend none of their coi 

election activities may bj'.•.! ;• rely wii 

CFR § 106.7(d)(1). 

Facts and Analysis 

paid eithi 

monthly log of the 

a federal election, 

en as follows: 

isated time in a given 

iun 'he federal accoimt 

it of their comper£S^^ time in a given 

from a account; and, 

in a given on federal 

It comply with'sbdte law. 11 

A. Facts 

During fieldworl 

maintain any mont 

time V^ipploye 

to do. 

sal^'.'"-d 

$3,1^-.2^i2 in payi 

I ..Emplo) 

111. 

lementSW payroll. DPW did not 

records to document the percentage of 

election. These logs are required 

[-federal funds used to pay employee 

not maintain monthly logs for 

lyroll paid as follows to DPW employees, 

iule H4 and paid with a mixture of federal and 

Ting tip:same month (totaling $2,192,554). 

.! on Schedule H4 and/or Schedule B and also paid with 

! .'c-leral and non-federal funds and exclusively non-federal 

funds d • - !'ie month (totaling $28,972); and 

Emplo}..- !- ..•i-n. usively with non-federal fwds in a given month and not 

reportei. » Mtaling $1,405,736)®. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the recordkeeping requirement with DPW representatives 

during the audit fieldwork and at the exit conference. DPW representatives asked 

^ This total does not include payroll for employees paid with 100 percent federal iunds and reported as 

such (see Part I, Background, Commission Guidance, Request for Early Commission Consideration of a 

Legal Question, Page 1). Payroll amounts are stated net of taxes and fringe benefits. 

' Some of these employees were paid fiom federal funds and reported as such in other months within the 

audit period. 
questions for clarification and said they would respond after having time to thoughtfiilly 

review each issue. Subsequently, DPW representatives stated that payroll logs had not 

been identified nor other evidence indicating that they were maintain^. However, DPW 

provided a statement contending that other information confirmed the basis on which 

employees were paid. DPW representatives supported this statement by providing 

exhibits with a basic job description for the employees and a narrative that stated, in part, 

"Beginning in February, 2011 and continuing through the summer of 2012, Wisconsin 

held multiple elections in connection with various recalls of state-level elected officials. 

Recall elections for nine Wisconsin state senators were held during the summer of 2011. 

Recall elections for the Governor, Lieutenant Govemor 

were held during the spring and summer of 2012. 

summer of 2012, the Corrunittee and its staff were 

elections. Employees directly involved in SUDDOI 

no work in coimection with federal elections 

with federal funds. 

In addition, DPW submitted documentatiori 

dates and events for both years 2011 and 201 

Corrunittee hired staff to work e^. 

recall elections." 

The statement and exhibits provide 

resolve the recordk( 

spent in connectic^'^iffi^^' el 

notification of 

additional state senators 

it 2011 and through the 

these nonfederal 

candidates performed 

were paid entirely 

-)-federal 

I a result o; 

iih various 

election 

events, the 

[sic] 

evidence and do not 

time an employee 

provided after 

The Interim Audit 

moni 

witt^l^eral e 

fu^ 

provide evidence that it maintained 

le an employee spent in connection 

in monthly payroll logs in the 

C. Com£^|tM Respons 

In response^^^e Interim 

employee reco^geping 

audits of state 

Commission's juri 

iudit Report 

it Rqiorf recommendation. Counsel stated that the 

appears to be one of the most common findings in recent 

Additionally, Counsel added that the scope of the 

lation to payments to employees with non-federal funds 

for exclusively non-;l • . _ ctivity has been a subject of recent Coirunission debate. 

Counsel believes the maintenance of monthly time logs is particularly burdensome for 

committees, such as DPW, that are heavily involved in non-federal election activity. 

Counsel stated that DPW participated in an unprecedented 13 non-federal elections 

during the 2012 election cycle. Counsel added that the non-federal elections arose 

unexpectedly as a result of the filing of petitions that led to the recall of 13 state senators, 

the lieutenant govemor, and the govemor. Counsel stated that the recall elections 

gamered nationwide attention. 

Despite these contentions. Counsel acknowledged the need to improve its system of 

maintaining monthly time logs. Counsel stated that a web-based system for employees to 
10 

enter and track time spent on federal election activity was developed. A screen shot of 

the new time log was also submitted. Counsel stated that having the new system 

electronically helps to ensure the records will not be lost or misplaced. Furthermore, 

Counsel stated that the web-based system complies with the requirements of Commission 

regulations. 

Counsel raised the question as to whether the Commission should apply the employee log 

requirement to a party committee heavily involved in non-federal elections. However, 

the log requirement of 11 CFR §106.7(d)(l) also applies to payroll paid exclusively out 

of non-federal funds. The language is broad in that it applies Ae term "each employee" 

and "each employee" necessarily includes all of a cormnii 

those who spend no time in connection with federal el 

a percentage of time spent in cormection with 

employees directly involved in supporting non-: 

connection with federal elections needs to be mrated in i 

of potential concerns about funding federal 

compliant funds, it can be verified for 

i! employees, including 

ause zero percent is also 

Counsel's statement that 

I performed no work in 

: to ensure that, in light 

1 related acti^^^th federally nonThe screen shot of the new time log shows emp 

description of work performed, p^>period, hours i 

activity, hours spent in the pay ] 

information entered is accurate, 

spends in connection with a federal < 

consistent with the I - -ayrdli^gg reoi 

§ 106.7(d)(1). As„.si;::' -compl " 

recommendatiori^ .- en . :r. ; a plan^a>.:, 

^6, 

to enti^i^^ame, 

pay period ori'li^-federal 

and a certification that the 

the time each employee 

; screen'^l^suggests, then it is 

I for^iy committees at 11 CFR 

fit Report 

payroll logs in the future.