FEDERAL ELECTION COMMISSION 

WASHINGTON. D.C. 20463 

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July 25. 2014 

MEMORANDUM 

To: 

Through: 

From: 

The Commission 

Alec Palmer 

Staff Director* ^ 

Patricia C. Orrock ^ * 

Chief Compliance Officer 

Thomas E. Hintermister 

Assistant Staff Director 

Audit Division 

O. Paciousfj[^ 

Audit Manager ^ 

Kendrick Smi 

Audit Manage! 

By: "^Sheraline ThomaSj^^^ 

Lead Auditor 

Subject: Rescind Approval of Finding 1 and Approve Revised Finding 1 

(Recordkeeping for Employees) -Audit Division Recommendation 

Memorandum on the Nebraska Democratic Party (Resubmission) -

Agenda Document No. 14-23 

On April 23,2014, the Commi.ssion approved Finding 1 (Recordkeeping for Employees), 

by a vote of 6-0 (see below), of the Audit Division Recommendation Memorandum on 

the Nebraska Democratic Party, as recommended in the Memorandum from the Chief 

Compliance Officer and the Audit Division dated March 27.2014. 

The Audit Division is recommending the Commission rescind its April 23,2014, 

approval of Finding 1 and approve the revised Finding 1 (Recordkeeping for Employees) 

set forth herein. 

Finding 1 (Recordkeeping for Employees), which was approved by a vote of 6-0, 

incorrectly identified payments to NDP employees totaling S300.708. This amount was 

incorrect becau.se 517,826 was improperly attributed to non-federal employees rather 

than to contract workers and should not have been included in the finding. Directive 70 

states that any finding that does not receive four or more affirmative votes will be moved 

to an "Additional Issues" section of the audit report. Notwithstanding, Audit does not 
intend to include any amounts in an "Additional Issues" section from the motion that 

failed by a vote of 3-3 because the finding does not include non-federal employees. 

For the Commission's convenience, we have set forth the Commission's April 23,2014, 

votes: 

Failed by a vote of 3-3 to: 

Approve the recommendation for Finding 1 (Recordkeeping), as set forth in 

Agenda Document No. 14-23, including S282,882 for which the committee 

allocated payroll between federal and non-federal funds and 517,826 for 

100% non-federal payments. 

Decided by a vote of 6-0 to: 

a. Approve the recommendation in Finding 1 (Recordkeeping), as set forth 

in Agenda Document No. 14-23, related to the 5282,882 that the 

committee disclosed as having been paid with an allocation of federal 

and non-federal funds and 53.642 that was paid from an exclusively 

non-federal account during periods in which they were also paid with 

federal funds. 

b. Direct the Audit Division to include in the Proposed Final Audit Report 

an Additional Issues section addressing the 514,184 for 1(X)% nonfederal payments. 

Recommendations: 

1. Rescind approval of the motion that was approved at the Open Meeting on April 23, 

2014 by a vote of 6-0 with respect to Finding 1 (Recordkeeping for Employees). 

2. Approve the revised Finding 1(Recordkeeping for Employees) as follows: 

Finding 1. Recordkeeping for Employees 

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

logs, as required, to document the percentage of the time each employee spent on 

federal election activity. For 2009 and 2010, the Audit staff identified payments 

to NDP employees totaling 5282,882 for whom NDP was required to maintain 

monthly payroll logs. All of these individuals were paid with an allocation of 

federal and non-federal funds and disclosed on 5chedule H4. During audit 

fieldwork. the Audit staff provided NDP with a schedule of employees paid with 

an allocation of federal and non-federal funds. An NDP representative completed 

this schedule by inserting the percentage of time each employee spent in 

connection with federal election activity and provided a signed affldavit in which 

he attested to the accuracy of information provided. 

In response to the Interim Audit Report recommendation, NDP stated that it has 

established procedures to maintain contemporaneous documents to certify the 

payroll records for employees paid exclusively with non-federal funds or with an 

allocation of federal and non-federal funds. NDP made no further comments in 

response to the DFAR. 
. It should be noted that this finding does not contain contract labor totaling 

S25,428'. 

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

maintain nionthly time logs to document the time employees spent on federal 

election activity totaling $282,882. 

3. Approve all technical and conforming edits to the Proposed Final Audit Report. 

In case an objection occurs, the Audit Division recommends this memorandum be placed 

on the next regularly scheduled open se.ssion agenda. 

This document is being circulated on a weekly tally vote basis. Should you have any 

questions regarding this matter, please contact Zuzana Pacious or Sheraline Thomas at 

694-1200. 

cc; Office of General Counsel 

' This number was revised based on a sub.scquent review of documents previously provided by the 

committee. 

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