Interim Audit Report of the 

Audit Division on the Tennessee 

Democratic Party 

(January 1, 2015 - December 31, 2016) 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that is 

required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a committee 

appears not to have met 

the threshold 

requirements for 

substantial compliance 

with the Act.1 The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report.

About the Committee (p. 2)

The Tennessee Democratic Party is a state party committee 

headquartered in Nashville, Tennessee. For more information, 

see the chart on the Committee Organization, p. 2. 

Financial Activity (p. 2)

 Receipts

o Contributions from Individuals 

o Contributions from Other 

Political Committees 

o Transfers from Affiliated/Other 

Party Committees 

o Transfers from Nonfederal 

Account 

o Other Receipts 

Total Receipts

$ 1,107,037 

 115,750 

 3,457,311 

 411,213 

 88,883 

$ 5.180,194 

 Disbursements

o Operating Expenditures 

o Transfers to Affiliated/Other 

Party Committees 

o Federal Election Activity 

o Other Disbursements 

Total Disbursements

 $ 1,217,969 

 3,161,140 

 643,657 

 160,453 

 $ 5,183,219 

Findings and Recommendations (p. 3) 

 Misstatement of Financial Activity (Finding 1) 

 Receipt of Contributions in Excess of the Limit (Finding 2) 

 Disclosure of Joint Fundraising Transfers (Finding 3) 

 Recordkeeping for Employees (Finding 4) 

 Reporting of Debts and Obligations (Finding 5) 

 

1

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

Division on the 

Tennessee Democratic Party 

(January 1, 2015 - December 31, 2016) 
Table of Contents 

 Page

Part I. Background 

 Authority for Audit 1 

 Scope of Audit 1 

Commission Guidance 1 

 

Part II. Overview of Committee 

Committee Organization 2 

 Overview of Financial Activity 2 

Part III. Summaries 

Findings and Recommendations 3 

Part IV. Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 5

Finding 2. Receipt of Contributions in Excess of the Limit 7

Finding 3. Disclosure of Joint Fundraising Transfers 10

Finding 4. Recordkeeping for Employees 11

Finding 5. Reporting of Debts and Obligations 12
 1

 

Part I 

Background 

Authority for Audit 

This report is based on an audit of the Tennessee Democratic Party (TDP), undertaken by 

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

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

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

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

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

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

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

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

Scope of Audit 

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

factors and as a result, this audit examined: 

1. the receipt of excessive contributions and loans; 

2. the receipt of contributions from prohibited sources; 

3. the disclosure of contributions received;

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

5. the disclosure of disbursements, debts and obligations; 

6. the disclosure of expenses allocated between federal and non-federal accounts; 

7. the consistency between reported figures and bank records; 

8. the completeness of records; and 

9. other committee operations necessary to the review. 

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,” several state party committees 

unaffiliated with TDP requested early consideration of a legal question raised during 

audits covering the 2010 election cycle. Specifically, the Commission addressed whether 

monthly time logs under 11 CFR §106.7(d)(1) were required for employees paid with 100 

percent federal funds. 

The Commission concluded, by a vote of 5-1, that 11 CFR §106.7(d)(1) does require 

committees to keep a monthly log for employees paid exclusively with federal funds. 

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

pursue recordkeeping violations for the 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 TDP representatives of the payroll requirement and the 

Commission’s decision not to pursue recordkeeping violations for failure to keep payroll 

logs for salaries paid and correctly reported as 100 percent federal. This audit report does 

not include any findings or recommendations with respect to TDP employees paid with 

100 percent federal funds and reported as such. 
 2 

Part II 

Overview of Committee 

Committee Organization 

Overview of Financial Activity 

(Audited Amounts) 

 

Cash-on-hand @ January 1, 2015 $ 12,080 

Receipts 

oContributions from Individuals 1,107,037 

oContributions from Other Political Committees 115,750 

oTransfers from Affiliated/Other Party Committees 3,457,311 

oTransfers from Nonfederal Account 411,213

oOther Receipts 88,883

Total Receipts $ 5,180,194 

Disbursements 

oOperating Expenditures 1,217,969 

oTransfers to Affiliated/Other Party Committees 3,161,140 

oFederal Election Activity 643,657

oOther Disbursements 160,453

Total Disbursements $ 5,183,219

Cash-on-hand @ December 31, 2016 $ 9,055 

Important Dates 

 Date of Registration May 19, 1983 

 Audit Coverage January 1, 2015 - December 31, 2016 

Headquarters Nashville, Tennessee 

Bank Information 

 Bank Depositories Three 

 Bank Accounts Three federal and one non-federal 

Treasurer 

 Treasurer When Audit Was Conducted Dr. Geeta McMillan 

 Treasurer During Period Covered by Audit Wade Munday: January 1, 2015 - 

December 31, 2016 

Management Information 

 Attended FEC Campaign Finance Seminar Yes 

 Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 
 3

 

Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity

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

records revealed a misstatement of receipts and disbursements for calendar year 2015. 

TDP understated its receipts and disbursements by $148,395 and $147,409, respectively. 

The Audit staff recommends that TDP amend its disclosure reports to correct the 

misstatements or file a Form 99 (Miscellaneous Document) to correct the misstatements. 

In addition, a comparison of TDP’s bank activity with its original reports filed for 2015 

and 2016 also revealed a material misstatement of receipt and disbursement activity. The 

Audit staff recommends that TDP provide any comments it deems necessary with respect 

to this matter. 

(For more detail, see p. 5.) 

Finding 2. Receipt of Contributions in Excess of the Limit 

The Audit staff reviewed contributions from individuals to determine if any exceeded the 

contribution limit. This review indicated that TDP received apparent excessive 

contributions totaling $201,274. Of these errors, $151,200 occurred as a result of TDP 

not resolving the excessive portions of contributions by notifying contributors that the 

contributions were transferred to the non-federal account. In response to the exit 

conference, TDP had no comments and submitted no additional documentation. The 

Audit staff recommends that TDP provide documentation demonstrating that these 

contributions were not excessive or, if excessive, were resolved in a timely manner. 

Absent such a demonstration, TDP should send letters to those contributors whose 

contributions are eligible for presumptive reattribution and/or refund any remaining 

excessive amounts that have not been previously transferred to the non-federal account. 

(For more detail, see p. 7.) 

Finding 3. Disclosure of Joint Fundraising Transfers 

During audit fieldwork, the Audit staff reviewed receipts to verify the accuracy of the 

information disclosed on TDP’s reports. TDP received net proceeds of $3,113,531 from 

two joint fundraisers but did not itemize memo entries totaling $1,509,766 on Schedules 

A (Itemized Receipts), as required. These memo entries represented the gross receipts 

from the original contributors. The Audit staff recommends that TDP file amended 

reports to itemize the memo entries or file a Form 99 (Miscellaneous Document) to 

itemize the memo entries. 

(For more detail, see p. 10.) 
 4

 

Finding 4. Recordkeeping for Employees 

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

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

spent in connection with a federal election. For 2015 and 2016, the Audit staff identified 

payroll allocated between federal and non-federal funds totaling $409,900, for which 

TDP did not maintain monthly payroll logs. Absent the provision of monthly payroll 

logs, the Audit staff recommends that TDP implement a plan to maintain such monthly 

payroll logs in the future. 

(For more detail, see p. 11.) 

Finding 5. Reporting of Debts and Obligations 

During audit fieldwork, the Audit staff noted that TDP failed to disclose debts and 

obligations owed to five vendors totaling $26,236. The Audit staff recommends that, 

absent documentation demonstrating that these expenditures did not require reporting on 

Schedule D (Debts and Obligations), TDP amend its reports to disclose these debts or file 

a Form 99 (Miscellaneous Document) to disclose these debts. 

(For more detail, see p. 12.) 
 5

 

Part IV 

Findings and Recommendations

Finding 1. Misstatement of Financial Activity 

Summary 

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

records revealed a misstatement of receipts and disbursements for calendar year 2015. 

TDP understated its receipts and disbursements by $148,395 and $147,409, respectively. 

The Audit staff recommends that TDP amend its disclosure reports to correct the 

misstatements or file a Form 99 (Miscellaneous Document) to correct the misstatements. 

In addition, a comparison of TDP’s bank activity with its original reports filed for 2015 

and 2016 also revealed a material misstatement of receipt and disbursement activity. The 

Audit staff recommends that TDP provide any comments it deems necessary with respect 

to this matter. 

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

Facts and Analysis 

A. Misstatement of Financial Activity – Most Recent Reports Filed Prior to the 

Audit 

1. Facts 

During audit fieldwork, the Audit staff reconciled TDP’s reported financial activity 

with its bank records for the calendar years 2015 and 2016. The reconciliation 

determined that TDP misstated receipts and disbursements for 2015. The following 

chart outlines the discrepancies between TDP’s disclosure reports and its bank 

records. The succeeding paragraphs explain why the discrepancies occurred.
 6

 

2015 Committee Activity 

Reported Bank Records Discrepancy

Opening Cash Balance 

@ January 1, 2015 $12,577 $12,079 $498 Overstated 

Receipts $714,262 $862,657 $148,395 

Understated 

Disbursements $659,107 $806,516 $147,409 

Understated 

Ending Cash Balance 

@ December 31, 2015 $67,732 $68,220 $488 Understated 

The understatement of receipts resulted from the following: 

 Contributions from individuals not reported $ 106,9502

 Transfer from affiliated committee not reported 43,500 

 Contribution from political committee not reported 1,000 

 Unexplained difference (3,055) 

 Net Understatement of Receipts $ 148,395 

The understatement of disbursements resulted from the following: 

 Transfers to Non-federal account not reported $ 105,000 

 Transfer to affiliated committee not reported 43,500 

 Disbursement reported incorrectly 115 

 Unexplained difference (1,206) 

 Net Understatements of Disbursements $ 147,409 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the misstatements for 2015 with TDP’s representatives 

during the exit conference and provided copies of relevant work papers detailing the 

misstatements. TDP representatives did not provide any comments. 

The Audit staff recommends that, within 30 calendar days of service of this report, 

TDP amend its disclosure reports or file a Form 99 (Miscellaneous Document) 3

 to 

correct the misstatements noted above, and reconcile the cash balance on its most 

recently filed report to include these adjustments and correct any subsequent 

discrepancies. 

 

2

 Of these unreported contributions, $105,000 represented excessive contributions (see Finding 2) that were 

 transferred timely to the non-federal account but not reported. 

3

 If the committee chooses to file a Form 99 instead of amending its disclosure reports, the form must 

 contain all pertinent information that is required on each schedule. 
 7

 

B. Misstatement of Financial Activity – Original Reports Filed 

1. Facts 

During audit fieldwork, in addition to examining TDP’s most recent reports filed 

prior to audit notification, the Audit staff also compared TDP’s originally filed 

reports with its bank records. The purpose of this additional reconciliation was to 

identify the degree to which TDP had misstated its original filings. 

The Audit staff calculated that TDP understated its receipts by $1,362,191 and 

understated its disbursements by $1,377,720 on the original reports filed over the 

two-year period ending December 31, 2016. These understatements in receipts and 

disbursements were primarily due to transfers received from and made to affiliated 

committees. In addition, these figures include the understatement of receipts 

($148,395) and disbursements ($147,409) discussed in Section A above 

(Misstatement of Financial Activity – Most Recent Reports Filed Prior to the Audit). 

The latest amendments filed prior to the audit corrected the understatement of 

receipts and disbursements related to the transfers. 

2. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the understatement of receipts and disbursements on 

TDP’s original reports during the exit conference. TDP representatives did not 

provide any comments. 

The Audit staff recommends that, within 30 calendar days of service of this report, 

TDP provide any additional comments it deems necessary with respect to this 

matter. 

Finding 2. Receipt of Contributions in Excess of the Limit 

Summary 

The Audit staff reviewed contributions from individuals to determine if any exceeded the 

contribution limit. This review indicated that TDP received apparent excessive 

contributions totaling $201,274. Of these errors, $151,200 occurred as a result of TDP 

not resolving the excessive portions of contributions by notifying contributors that the 

contributions were transferred to the non-federal account. In response to the exit 

conference, TDP had no comments and submitted no additional documentation. The 

Audit staff recommends that TDP provide documentation demonstrating that these 

contributions were not excessive or, if excessive, were resolved in a timely manner. 

Absent such a demonstration, TDP should send letters to those contributors whose 

contributions are eligible for presumptive reattribution and/or refund any remaining 

excessive amounts that have not been previously transferred to the non-federal account. 

Legal Standard. 

A. Party Committee Limits. A party committee may not receive more than a total of 

$10,000 per year from any one individual. This limit is shared by the state, district, 

and local party committees. 52 U.S.C. §30116(a)(1)(D) and 11 CFR §110.9. 
 8

 

B. Handling Contributions That Appear Excessive. If a committee receives a 

contribution that appears to be excessive, the committee must either: 

 Return the questionable check to the donor; or 

 Deposit the check into its federal account and: 

 Keep enough money in the account to cover all potential refunds or 

establish a separate account in a campaign depository for such 

contributions; 

 Keep a written record explaining why the contribution may be illegal; 

 Include this explanation on Schedule A if the contribution has to be 

itemized before its legality is established; 

 Seek a reattribution of the excessive portion, following the instructions 

provided in the Commission regulations (see below for explanation of 

reattribution); and 

 If the committee does not receive a proper reattribution within 60 days 

after receiving the excessive contribution, refund the excessive portion to 

the donor. 11 CFR §§103.3(b)(3), (4) and (5) and 110.1(k)(3)(ii)(B). 

C. Joint Contributions. Any contribution made by more than one person, except for a 

contribution made by a partnership, must include the signature of each contributor on 

the check, money order, or other negotiable instrument or in a separate writing. A 

joint contribution is attributed equally to each donor unless a statement indicates that 

the funds should be divided differently. 11 CFR §110.1(k)(1) and (2). 

D. Reattribution of Excessive Contributions. The Commission regulations permit 

committees to ask donors of excessive contributions (or contributions that exceed the 

committee’s net debts outstanding) whether they had intended their contribution to be 

a joint contribution from more than one person and whether they would like to 

reattribute the excess amount to the other contributor. The committee must inform 

the contributor that: 

 The reattribution must be signed by both contributors; 

 The reattribution must be received by the committee within 60 days after the 

committee received the original contribution; and 

 The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(k)(3). 

Within 60 days after receiving the excessive contribution, the committee must either 

receive the proper reattribution or refund the excessive portion to the donor. 11 CFR 

§§103.3(b)(3) and 110.1(k)(3)(ii)(B). Further, a political committee must retain 

written records concerning the reattribution in order for it to be effective. 11 CFR 

§110.1(l)(5). 

Notwithstanding the above, any excessive contribution that was made on a written 

instrument that is imprinted with the names of more than one individual may be 

presumptively attributed among the individuals listed unless instructed otherwise by 

the contributor(s). The committee must inform each contributor: 

 How the contribution was attributed; and 
 9

 

 The contributor may instead request a refund of the excessive amount. 11 CFR 

§110.1(k)(3)(B). 

E. Receipt of Contributions. Organizations that are political committees under the Act, 

other than national party committees shall establish a separate Federal account in a 

depository in accordance with 11 CFR part 103. Such account shall be treated as a 

separate Federal political committee that must comply with the requirements of the 

Act including the registration and reporting requirements of 11 CFR parts 102 and 

104. Only funds subject to the prohibitions and limitations of the Act shall be 

deposited in such separate Federal account. 11 CFR §102.5(a). 

Facts and Analysis 

A. Facts 

The Audit staff utilized sample testing and a review of other contributions not included in 

the sample population to identify apparent excessive contributions from individuals. 

Excessive Contributions-Testing Method 

Sample Projection Amount4 $34,824 

High Dollar/Other Review Contribution Error 

Amount $166,4505

Total Amount of Excessive Contributions $201,274 

Reasons for Excessive Contributions 

Contributions not resolved via presumptive letter 

or refund $201,274 

Total Amount of Excessive Contributions $201,274

B. Additional Information 

TDP did not maintain a separate account for questionable contributions. Based on its 

cash-on-hand at the end of the audit period (December 31, 2016), it appears that TDP did 

not maintain sufficient funds to make refunds of the remaining excessive contributions 

that had not been previously transferred to the non-federal account. 

C. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter with TDP representatives at the exit conference and 

provided schedules of the apparent excessive contributions. In response to the exit 

conference, TDP representatives did not provide any comments and did not submit any 

additional documentation. The Audit staff concludes that TDP has not resolved any of 

the excessive contributions. 

 

4

 The sample error amount ($34,824) was projected using a Monetary Unit Sample with a 95 percent 

 confidence level. The sample estimate could be as low as $12,430 or as high as $109,828. 

5

 Of these errors, $151,200 occurred as a result of TDP not resolving the excessive portions of contributions 

 by notifying contributors that the contributions were transferred to the non-federal account. 
 10

 

The Audit staff recommends that, within 30 calendar days of service of this report, TDP 

provide documentation demonstrating that these contributions were not excessive or, if 

excessive, were resolved in a timely manner. Absent such a demonstration, TDP should 

send letters to those contributors whose contributions are eligible for presumptive 

reattribution and/or refund any remaining excessive amounts that have not been 

previously transferred to the non-federal account.

Finding 3. Disclosure of Joint Fundraising Transfers 

Summary 

During audit fieldwork, the Audit staff reviewed receipts to verify the accuracy of the 

information disclosed on TDP’s reports. TDP received net proceeds of $3,113,531 from 

two joint fundraisers but did not itemize memo entries totaling $1,509,766 on Schedules 

A (Itemized Receipts), as required. These memo entries represented the gross receipts 

from the original contributors. The Audit staff recommends that TDP file amended 

reports to itemize the memo entries or file a Form 99 (Miscellaneous Document) to 

itemize the memo entries. 

Legal Standard 

A. Itemization of Contributions from Joint Fundraising Efforts. Participating 

political committees shall report joint fundraising proceeds in accordance with 11 

CFR §102.17(c)(8) when such funds are received from the fundraising 

representative. 11 CFR §102.17(c)(3)(iii). 

Each participating political committee reports its share of the net proceeds as a 

transfer-in from the fundraising representative and shall also file a memo 

Schedule A itemizing its share of gross receipts as contributions from the original 

contributors to the extent required under 11 CFR §104.3(a). 11 CFR §102.17(c) 

(8)(i)(B). 

B. Itemization required. Political committees must itemize: 

 Any contributions from an individual if it exceeds $200 per calendar year either 

by itself or when aggregated with other contributions from the same contributor. 

11 CFR §104.3(a)(4)(i); and 

 Every contribution from any political committee, regardless of the amount. 52 

U.S.C. §30104(b)(3)(A) and (B). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff determined that TDP received a total of 

$3,113,531 in net proceeds from joint fundraising activity; $3,021,100 from Hillary 

Victory Fund (HVF) and $92,431 from the Tennessee State Party Victory Fund (TVF). 

However, TDP did not itemize memo entries totaling $1,509,766 on Schedules A 

(Itemized Receipts) from the HVF ($1,423,722) and the TVF ($86,044). 
 11

 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed this matter with TDP representatives and 

provided schedules detailing the missing disclosure items. TDP representatives did not 

provide any comments. 

The Audit staff recommends that, within 30 calendar days of service of this report, TDP 

file amended Schedules A to itemize the required memo entries or file a Form 99 

(Miscellaneous Document) 6 to itemize the memo entries. 

Finding 4. Recordkeeping for Employees 

Summary 

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

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

spent in connection with a federal election. For 2015 and 2016, the Audit staff identified 

payroll allocated between federal and non-federal funds totaling $409,900, for which 

TDP did not maintain monthly payroll logs. Absent the provision of monthly payroll 

logs, the Audit staff recommends that TDP implement a plan to maintain such monthly 

payroll logs in the future. 

Legal Standard 

Maintenance of Monthly Logs. Committees must keep a monthly log of the percentage 

of time each employee spends in connection with a federal election. Allocations of 

salaries, wages, and fringe benefits are to be undertaken as follows: 

 employees who spend 25 percent or less of their compensated time in a given 

month on federal election activities must be paid either from the federal account 

or have their pay allocated as administrative costs; 

 employees who spend more than 25 percent of their compensated time in a given 

month on federal election activities must be paid only from a federal account; and 

 employees who spend none of their compensated time in a given month on federal 

election activities may be paid entirely with funds that comply with State law. 11 

CFR §106.7(d)(1). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbursements for payroll. TDP did not 

maintain any monthly logs or equivalent records to document the percentage of time each 

employee spent in connection with a federal election. These logs are required to 

document the proper allocation of federal and non-federal funds used to pay employee 

salaries and wages. For 2015 and 2016, TDP did not maintain monthly logs for $409,900 

in payroll.7

 This amount consisted entirely of payroll which was reported on Schedule 

 

6

 If the committee chooses to file a Form 99 instead of amending its disclosure reports, the form must 

 contain all pertinent information that is required on each schedule. 7

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

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

 Question, Page 1). Payroll amounts do not include fringe benefits. 
 12

 

H4 (Disbursements for Allocated Federal and Non-Federal Activity) and paid with an 

allocation of federal and non-federal funds during the same month. There was no payroll 

paid exclusively with non-federal funds. 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed the payroll recordkeeping requirement 

with TDP representatives and provided them schedules of the payroll transactions. TDP 

representatives did not provide any comments. 

For TDP employees that were paid with an allocation of federal and non-federal funds, 

the Audit staff recommends that, within 30 calendar days of service of this report, TDP 

complete the following: 

 provide evidence that monthly time logs were maintained to document the 

percentage of time an employee spent in connection with a federal election; or 

 provide and implement a plan to maintain monthly payroll logs in the future. 

Finding 5. Reporting of Debts and Obligations 

Summary 

During audit fieldwork, the Audit staff noted that TDP failed to disclose debts and 

obligations owed to five vendors totaling $26,236. The Audit staff recommends that, 

absent documentation demonstrating that these expenditures did not require reporting on 

Schedule D (Debts and Obligations), TDP amend its reports to disclose these debts or file 

a Form 99 (Miscellaneous Document) to disclose these debts. 

Legal Standard 

A. Continuous Reporting Required. A political committee must disclose the amount 

and nature of outstanding debts and obligations owed by or to the reporting committee 

until those debts are extinguished. 

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

B. Separate Schedules. A political committee must file separate schedules for debts 

owed by or to the committee, together 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. 

 A debt of $500 or less, not including rent, salary or other regularly reoccurring 

administrative expenses, must be reported once it has been outstanding 60 days 

from the date incurred (the date of the transaction); the committee reports it on the 

next regularly scheduled report.

 Regularly recurring administrative expenses, like rent, do not have to be treated as 

debts until payment is due. 

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

which the debt was incurred. 11 CFR §104.11(b). 
 13

 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed TDP’s disbursement records and 

disclosure reports for proper reporting of debts and obligations. This review identified 

debts owed to five vendors totaling $26,236 that were not reported on Schedule D. These 

vendors mainly provided research, fundraising consulting, rent8

, accounting services and 

software. 

The Audit staff calculated the debts owed to the vendors based on the invoice date and 

the subsequent payment date. Debts were outstanding for periods ranging from 34 days 

to 564 days. TDP did not report any debt on Schedule D during the audit cycle. 

 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed this matter at the exit conference and provided TDP 

representatives a schedule detailing the transactions requiring disclosure on Schedule D. 

TDP representatives did not provide any comments. 

The Audit staff recommends that, within 30 calendar days of service of this report, TDP 

provide additional documentation demonstrating that these transactions were not 

obligations which required reporting on Schedule D. Absent such documentation, the 

Audit staff recommends that TDP amend its reports or file a Form 99 (Miscellaneous 

Document) 9 to correctly disclose these debts and obligations on Schedule D. 

 

8

 Rent included an additional suite during 2016 and also included unpaid operating expenses. The debt 

 was outstanding for a period of 45 to 140 days. 

9

 If the committee chooses to file a Form 99 instead of amending its disclosure reports, the form must 

 contain all pertinent information that is required on each schedule.