Interim Audit Report of the 

Audit Division on the 

Republican Party of Iowa 

(January 1, 2009 - December 31, 2010) 

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.* 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 Republican Party of Iowa is a state party committee, 

headquartered in Des Moines, Iowa. For more information, 

see chart on Committee Organization, p 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals 

o Contributions from Other 

Political Committees 

o Transfers from Political 

Committees 

o Non-federal Transfers 

o Other Receipts 

Total Receipts 

• Disbursements 

o Operating Expenditures 

o Federal Election Activity 

o Allocated Federal/Non-federal 

Expenditures 

o Coordinated Expenditures 

o Other Disbursements 

Total Disbursements 

$ 1,130,254 

489,716 

633,129 

325,042 

164,904 

$ 2,743,045 

$ 953,976 

526,610 

931,448 

276,578 

54,736 

$ 2,743,348 

Findings and Recommendations (p. 3) 

• Recordkeeping for Employees (Finding 1) 

• Failure to Itemize Debts & Obligations (Finding 2) 

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

Audit Division on the 

Republican Party of Iowa 

(January 1, 2009 - December 31, 2010) 
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. Recordkeeping for Employees 4 

Finding 2. Failure to Itemize Debts & Obligations 5 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Republican Party of Iowa (RPIA), 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 internal review of reports fried by selected 

committees to determine whether 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 contributions and loans; 

2. the disclosure of individual contributors' occupation and name of employer; 

3. the consistency between reported frgures and bank records; 

4. the disclosure of disbursements, debts, and obligations; 

5. the completeness of records; and 

6. 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 RPIA requested early consideration of a legal question raised during an 

audit. Specifrcally, 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 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. 

Audit staff informed RPIA representatives of the payroll log requirement and of 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 recommendation with respect to RPIA employees paid with 

100 percent federal funds and reported as such. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration October 14,1975 

• Audit Coverage January 1,2009 - December 31,2010 

Headquarters Des Moines, Iowa 

Bank Information 

• Bank Depositories One 

• Bank Accounts Four federal, one Non-federal, and one 

building fund account 

Treasurer 

• Treasurer When Audit Was Conducted Craig Williams 7/9/10-6/15/12 

• Treasurer During Period Covered by Audit Gopal Krishna 6/24/08-1/26/09 

Matt Randall 1/27/09-7/08/10 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

No 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand @ January 1,2009 $ 218,208 

Receipts 

o Contributions from Individuals 1.130,254 

o Contributions from Other Political 

Committees 489,716 

o Transfers from Political Committees 633,129 

o Non-federal Transfers 325,042 

o Other Receipts 164,904 

Total Receipts $ 2,743,045 

Disbursements 

o Operating Expenditures 953,976 

o Federal Election Activity 526,610 

o Allocated Federal/Non-federal Expenditures 931,448 

o Coordinated Expenditures 276,578 

o Other Disbursements 54,736 

Total Disbursements $ 2,743,348 

Cash-on-liand @ December 31,2010 $ 217,905 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Recordkeeping for Employees 

During audit fieldwork, the Audit staff determined that RPIA did not maintain monthly 

payroll logs, as required, to track the percentage of time each employee spent on federal 

election activity. For 2009 and 2010, the amount of payroll for which logs were required, 

was $476,442. This consisted of $334,580, shared federal/non-federal payroll, and 

$141,862, paid exclusively with non-federal funds. For RPIA employees paid with an 

allocation of federal and non-federal funds, and for those paid with 100 percent nonfederal funds, the Audit staff recommends that RPIA implement a plan to maintain 

monthly payroll logs to track the percentage of time each employee spends on federal 

election activity. 

(For more detail, see p. 4.) 

Finding 2. Failure to Itemize Debts & Obligations 

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

obligations totaling $ 186,515. The Audit staff recommends that, absent documentation 

demonstrating that these expenditures did not require reporting on Schedule D (Debts and 

Obligations), RPIA amend its disclosure reports to disclose these debts. 

(For more detail, see p. 5.) 
Part IV 

Findings and Recommendations 

Finding 1. Recordkeeping for Employees 

Summary 

During audit fieldwork, the Audit staff determined that RPIA did not maintain monthly 

payroll logs, as required, to track the percentage of time each employee spent on federal 

election activity. For 2009 and 2010, the amount of payroll for which logs were required, 

was $476,442. This consisted of $334,580, shared federal/non-federal payroll, and 

$141,862, paid exclusively with non-federal funds. For RPIA employees paid with an 

allocation of federal and non-federal funds, and for those paid with 100 percent nonfederal funds, the Audit staff recommends that RPIA implement a plan to maintain 

monthly payroll logs to track the percentage of time each employee spends on federal 

election activity. 

Legal Standard 

Maintenance of Monthly Logs. Party 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% or less of their compensated time in a given month on 

federal election activities must be paid either from the federal account or be 

allocated as administrative costs; 

• employees who spend more than 25% 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)(l). 

Facts and Analysis 

A. Facts 

During fieldwork, the Audit staff reviewed disbursements made to employees totaling 

$476,442^,^ for which RPIA did not provide monthly payroll logs to document the 

percentage of time the employee spent in connection widi federal election activity. These 

logs are required to document the proper allocation of federal and non-federal funds used 

to pay these workers. The total of $476,442 consisted of $334,580, for which payroll was 

allocated between federal and non-federal funds, and $141,862 that was paid exclusively 

with non-federal funds. 

^ Payroll amounts are stated net of taxes and fringe benefits. 

' Payments to RPIA employees paid with 100 percent federal funds and reported as such are not included 

in this flnding. (See Background Section - Request for Early Consideration of Legal Question.) 
B. Interim Audit Report & Audit Division Recommendation 

The Audit staff discussed the recordkeeping issue with RPIA representatives during audit 

fieldwork and at the exit conference. While the representatives did not address logs or 

other documentation to support the payroll recordkeeping requirements, they pointed out 

that RPIA Counsel had drafted affidavits to document the work performed by RPIA 

employees. Subsequently, RPIA provided affidavits from two employees who attested to 

the percentage of time they had spent in connection with federal election activity. These 

documents, however, do not resolve the recordkeeping finding because RPIA provided 

the affidavits only after notification of the audit. As such, RPIA did not appear to satisfy 

the requirement to maintain and provide pa3n:oll records during or prior to audit 

fieldwork. 

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

payroll not reported and paid with 100% federal funds, RPIA: 

• provide evidence that it maintained monthly time logs to document how much 

time an employee spent on federal election activity; or 

• provide and implement a plan to maintain monthly payroll logs to track the 

percentage of time each employee spends on federd election activity. 

Finding 2. Failure to Itemize Debts & Obligations 

Summary 

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

obligations totaling $186,515. The Audit staff recommends that, absent documentation 

demonstrating that these expenditures did not require reporting on Schedule D (Debts and 

Obligations), RPIA amend its disclosure reports to disclose these debts. 

Legal standard 

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

and nature of outstanding debts and obligations until those debts are extinguished. 

2 U.S.C §434(b)(8) and 11 CFR §§104.3(d) andl04.11(a). 

B. Itemizing Debts and Obligations. 

• A debt of $500 or less 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. 

• 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). 
Facts and Analsrsis 

A. Facts 

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

the accounts^ for two RPIA vendors. These vendors provided RPIA with fundraising, 

telemarketing, phone services and direct mail. The debt balances owed were outstanding 

in almost every reporting period throughout the period covered by the audit. As 

described below, the Audit staff identified debts and obligations totaling $186,515 that 

were not disclosed on Schedules D (Debts and Obligations). 

The Audit staff reviewed invoiced information and identified unreported debt and 

obligations to one of these vendors totaling $173,549. This unreported debt represents 

93% of total reportable debt by RPL\. 

In addition to the unreported debt discussed above, RPIA under-reported debt totaling 

$12,966^ to another vendor. 

B. Interim Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to RPIA representatives at the exit conference and 

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

audited cycle. 

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

provide documentation demonstrating that these expenditures did not require reporting on 

Schedules D. Absent such documentation, the Audit staff recommends that RPIA amend 

its reports to disclose the unreported debts totaling $173,549 and to correct the underreported debt totaling $12,966. 

* The reconciliation consisted of calculating invoiced and paid amounts for individual reporting periods in 

the 2009-2010 campaign cycle. The Audit stafT then determined whedier any outstanding debts were 

correctly disclosed on Schedule D. Each debt amount was counted once, even if it required disclosure over 

multiple reporting periods. 

^ The totai amount reportable to this vendor vras $16,039. RPIA reported only $3,073 on its 2009 and 

2010 disclosure reports. The under-reported amount was calculated as follows: $16,039 - $3,078 ~ 

$12,966.