FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

January 20,2011 

MEMORANDUM 

To: 

Through: 

From: 

By: 

Subject: 

The Commission 

Alec Palmer 

Acting Staff Director 

Patricia Carmona 

Chief Compliance Officer 

Joseph F. Stoltz ufj ^ 

Assistant Staff DirMor 

Audit Division ^ / 

Thomas Hintermister ^f^ ^ 

Audit Manager } ^ 

Henry Miller 

Lead Audito 

Audit Division Recommendation Memorandum on the Indiana Democratic 

Congressional Victory Committee (A08-04) 

Pursuant to Commission Directive No. 70 (FEC Directive on Processmg Audit 

Reports), the Audit Division recommends the Commission approve the findings as 

presented in the attached Draft Final Audit Report (DFAR). The Office of General 

Counsel has reviewed this memorandum and concurs with die reconmiendation. 

The Committee did not request an audit hearing. 

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

in the recently approved format within 30 days of the Commission's vote. 

Should an objection be received. 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 on Voting Ballot Matters. 

Should you have any questions, please contact Henry Miller or Thomas Hintermister at 

694-1200. 

Attachment as stated 

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

Audit Division on the Indiana 

Democratic Congressional 

Victory Committee 

January 1, 2007 - December 31, 2008 

Why the Audit 

Was Done 

Federal law permits the 

Commission to conduct 

audits and field 

investigations of any 

political committee that 

is required to file reports 

under the Federal 

Election Campaign Act 

(the Act). The 

Commission generally 

conducts such audits 

when a conmiittee 

appears not to ha\g 

the threshold 

requirements for 

substantial compli 

withdi^^^ii] 

det^^^^^ 

co^^mee compile 

the l^^^ons, 

prohibm^k^d 

disclosure^mmrements 

of the Act. 

Future Acti^ 

The Commission may' 

initiate an enforcement 

action, at a later time, 

with respect to any of the 

matters discussed in this 

report. 

Ahout the Committee (p. 2) 

The Indiana Democratic ^^^^ssional Victory Committee 

(IDCVC) is a state pa^^^^mnittee headquartered in Indianapolis, 

Indiana. For more ic^^^^^jsi:, see chart on the Committee 

Organization, 

Financ^^^tivity (p. 2) 

• Receipts 

o ContriHi^^s fior^^ividuals 

Contribution^^^^%er 

^litical Co^^^ps 

firom ^^iated and 

Commit 

o mansters^^m^NonExpenditures 

Contributions to Federal 

ididates 

o <£K)ordinated Expenditures 

o Shared Federal/Non-Federal 

Activity 

o Federal Election Activity (FEA) 

o Other Disbursements 

o Total Disbursements 

$ 760,749 

1,653,323 

5,050,457 

1,327,158 

1,043,844 

41,222 

$ 9,876,753 

$ 2,500,539 

60,000 

151,023 

1,785,831 

5,285,993 

22,380 

$ 9,805,766 

Finding and Recommendation (p. 3) 

• Misstatement of Financial Activity (Finding 1) 

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

Audit Division on the 

Indiana Democratic Congressional 

Victory Committee 

January 1, 2007 - Despmber 31, 2008 
Table of Contents 

Part I. Background 

Authority for Audit 

Scope of Audit 

Part II. Overview of Committee 

Committee Organization 

Overview of Financial Activity 

Part III. Summary 

Finding and Recommendation 

Part IV. Findings and Recom^i^dat 

Finding 1. Misstatement of Eiftancial Activr 

Page 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the Indiana Democratic Congressional Victory 

Committee (IDCVC), 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 2 

U.S.C. §438(b), which permits the Commission to conduct audits and field investigations 

of any political committee that is required to file a report under 2 U.S.C. §434. Prior to 

conducting any audit under this subsection, the Commission must perform an intemal 

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. 2 U.S.C. §438(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 or prohibited contributions fi-om other political committees; 

2. The disclosure of contributions received from other political committees; 

3. The disclosure of individual contributors' occupation and name of employer; 

4. The disclosure of disbursements, debts and obligations; 

5. The disclosure of expenses allocated between federal and non-federal accounts; 

6. The consistency between reported figures and bank records; 

7. The completeness of records; 

8. Other committee operations necessary to the review. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates IDCVC 

• Date of Registration March 26,1979 

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

Headquarters Indianapolis, Indiana 

Bank Information 

• Bank Depositories One 

• Bank Accounts Seven federal and three non-federal 

Treasurer 

• Treasurer When Audit Was Conducted Sherrianne Standley 

• Treasurer During Period Covered by Audit Linda Buzinec 

Management Information 

• Attended FEC Campaign Finance Seminar No 

• Used Commonly Available Campaign 

Management Software Package 

Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 
Overview of Financial Activity 

(Audited Amounts) 

Cash on hand January 1,2007 $ 42,921 

Receipts 

o Contributions firom Individuals $760,749 

o Contributions firom Political Committees 1,653,323 

o Transfers fi'om Affiliated and Other Party 

Committees 5,050,457 

o Transfers from Non-federal Accounts 1,327,158 

o Offsets to Operating Expenditures 1,043,844 

o Other Receipts 41,222 

Total Receipts $ 9,876,753 

Disbursements 

o Operating Expenditures $2,500,539 

o Contributions to Federal Candidates 60,000 

o Coordinated Expenditures 151,023 

o Shared Federal/Non Federal Activity 1,785,831 

o Federal Election Activity (FEA) 5,285,993 

o Other Disbursements 22,380 

Total Disbursements $ 9,805,766 

Cash on hand December 31,2008 $ 113,908 
Part III 

Summary 

Finding and Recommendation 

Finding 1. Misstatement of Financial Activity 

A comparison of IDCVC's reported financial activity to the bank records revealed a 

misstatement of the opening cash balance, receipts, disbursements and the ending cash balance 

for 2007. IDCVC overstated the opening cash balance by $109,731, understated receipts by 

$134,368, understated disbursements by $149,502 and overstated the ending cash balance by 

$124,866. The interim audit report recommended that IDCVC amend its disclosure reports to 

correct the misstated amounts noted above. In response to the interim audit report 

recommendation, IDCVC amended its reports to materially correct the misstatements. (For more 

detail, see p. 5) 
Part IV 

Finding and Recommendation 

Finding 1. Misstatement of Financial Activity 

Summary 

A comparison of IDCVC's reported financial activity to the bank records revealed a 

misstatement ofthe opening cash balance, receipts, disbursements and the ending cash balance 

for 2007. IDCVC overstated the opening cash balance by $109,731, understated receipts by 

$134,368, understated disbursements by $149,502 and overstated the ending cash balance by 

$124,866. The interim audit report recommended that IDCVC amend its disclosure reports to 

correct the misstated amounts noted above. In response to the interim audit report 

reconmiendation, IDCVC amended its reports to materially correct the misstatements. 

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; and 

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

• Certain transactions that require itemization on Schedule A (Itemized Receipts) or Schedule 

B (Itemized Disbursements). 2 U.S.C. §434(b)(l), (2), (3), (4), (5). 

Facts and Analysis 

The Audit staff reconciled the reported financial activity to the bank records and determined 

there was a misstatement of opening cash balance, receipts, disbursements and ending cash 

balance in 2007. The following chart outlines the discrepancies. 

2007 Activity 

Reported Bank Records Discrepancy 

Opening Cash Balance 

@ January 1,2007 

$152,652 $42,921 $(109,731) 

Overstated 

Receipts $1,167,818 $1,302,186 $134,368 

Understated 

Disbursements $1,184,853 $1,334,355 $149,502 

Understated 

Ending Cash Balance 

@ December 31,2007 

$135,617 $10,752 $(124,866) 

Overstated 

Opening Cash Balance 2007 

The $109,731 overstatement of beginning cash on hand is likely the result of prior period 

discrepsincies. 
Receipts 2007 

The understatement of receipts in 2007 was a result of the following: 

• Net transfers from non-federal account not reported + $121,447 

• Unexplained Difference + 12,921 

Net Understatement of Receipts $134,368 

Disbursements 2007 

The understatement of disbursements in 2007 was a result of the following: 

• Payroll related expenses and bank fees not reported + $145,953 

• In-kind contributions to the DNC for use ofmailing list not + 6,200 

reported 

• Unexplained Difference - 2,651 

Net Understatement of Receipts $149,502 

Ending Cash Balance 2007 

IDCVC overstated its ending cash balance by $124,866 on December 31,2007. This 

misstatement was due to the adjustments described above. 

The matter was presented to IDCVC during the exit conference. IDCVC representatives 

acknowledged the discrepancies in the 2007 reports and indicated that the corrections would be 

made if necessary. 

Interim Audit Report Recommendation and Committee Response 

The Audit staff recommended that, within 30 calendar days of service of this report, IDCVC: 

• Amend its 2007 reports to correct the misstatements detailed above, including appropriate 

Schedules A, B, H3 and H4; 

• Amend their most recently filed report to correct the cash on hand balance with an 

explanation that the change was the result of prior period audit adjustments; and 

• Reconcile the cash balance on its most recent report to identify any subsequent 

discrepancies that may impact adjustments recommended by the Audit staff. 

In response to the interim audit report recommendation, IDCVC amended its reports to 

materially correct the misstatements noted above.