Preliminary Audit Report of the 

Audit Division on Buddy Roemer 

for President, Inc. 

(Febniaiy 28, 2011 - December 31, 2013) 

Why the Audit 

Was Done 

Federal law requires the • 

Commission to audit . 

every political committee 

established by a candidate 

who receives public funds 

for the primary 

campaign.' The audit 

determines whether the 

candidate was entitled to 

all of the matching funds 

received, whether the 

campaign used the 

matching funds in 

accordance with the law, 

whether the candidate is 

entitled to additional 

matching funds, and 

whether the campaign 

otherwise complied with 

the limitations, 

prohibitions, and 

disclosure requirements 

of the election law. 

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 Campaign (p. 2) 

Buddy Roemer for President, Inc. is die principal campaign 

committee for Charles K Roemer in, a candidate for the Reform 

Party's^ nomination for the office of President of the United 

States. The Committee is headquartered in Newport, Kentucky. 

For more information, see the chart on the Campaign 

Organization, p. 2. 

Financial Activitjr^ (p. 3) 

t Receipts 

o Contributions from Individuals 

o Matching Flmds Received 

o Contributions from the Candidate 

o Loans from the Candidate 

o Offsets to Operating Expenditures 

Total Receipts 

• Disbursements 

o Operating Expenditures 

o Loan Repayments 

o Contribution Refimds 

Total Disbursements 

$374,937 

351,961 

25,100 

24,900 

3,997 

$780,895 

$ 671,827 

4,900 

30,412 

$707,139 

Findings and Recommendations (p. 4) 

Finding 1. Net Outstanding Campaign Obligations 

Finding 2. Reporting of Debts and Obligations 

' 26U.S.C.§9038(a). 

' Buddy Roemer (the Candidate) originally was afTiiiated with the Republican Party and changed party 

affiliation during the audit period. 

' Financial Activity fh>m February 28,2011 thru July 31,2012. 
Preliminaiy Audit Report 

of the Audit Division on 

Buddy Roemer for President, Inc. 

(Februaiy 28, 2011 - December 31, 2013) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Inventory of Campaign Records 1 

Part II. Overview of Campaign 

Campaign Organization 2 

Overview of Financial Activity 3 

Part III. Summaries 

Findings and Recommendations 4 

I 

Part IV. Findings and Recommendations 

Net Outstanding Campaign Obligations 5 

Reporting of Debts and Obligations 7 

UK 
Parti 

Background 

Authority for Audit 

This report is based on an audit of Buddy Roemer for President, Inc. (BRFP), undertaken 

by the Audit Division of the Federal Election Commission (the Commission) as 

mandated by Section 9038(a) of Title 26 of the United States Code. That section states, 

"After each matching payment period, the Commission shall conduct a thorough 

examination and audit of the qualified campaign expenses of every candidate and his 

authorized committees who received [matching] payments under section 9037." Also, 

Section 9039(b) of the United States Code and Section 9038.1(a)(2) of the Commission's 

Regulations state that the Commission may conduct other examinations and audits from 

time to time as it deems necessary. 

Scope of Audit 

This audit examined; 

1. the campaign's compliance with limitations for contributions and loans; 

2. the campaign's compliance with limitations for candidate contributions and loans; 

3. the campaign's compliance with the prohibition on accepting prohibited contributions; 

4. the disclosure of contributions and loans received; 

5. the disclosure of disbursements, debts and obligations; 

6. the consistency between reported figures and bank records; 

7. the accuracy of the Statement of Net Outstanding Campaign Obligations; 

8. the campaign's compliance with spending limitations; 

9. the completeness of records; and 

10. other campidgn operations necessary to the review. 

Inventory of Campaign Records 

The Audit staff routinely conducts an inventory of campaign records before it begins 

audit fieldwork. BRFP's records were materially complete and fieldwork commenced 

immediately. 
Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Date of Registration March 3,2011 

• Eligibility Period* February 3,2012 - May 31.2012 

• Audit Coverage^ February 28.2011 - December 31.2013 

Headquarters Newport. Kentucky 

Bank Information 

• Bank Depositories One 

• Bank Accounts Two checking accounts 

Treasurer 

• Treasurer When Audit Was Conducted Taunton Melville 

• Treasurer During Period Covered by Audit Taunton Melville 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Volunteer and Paid Staff 

* On December 29,2011, the Candidate submitted a signed letter to the Commission seeking to become 

eligible to receive Presidential primary matching funds and agreeing that he and his authorized 

committee would comply with the conditions set forth in 11 CFR §9033.1(b). A threshold submission 

was submitted on December 30,2011, and the Commission certified the Candidate as eligible to receive 

matching funds on February 3,2012. The period during which the Candidate was eligible for matching 

funds ended on May 31,2012, the date of ineligibility. 

' The Audit staff conducted limited reviews of receipts and expenditures after July 31,2012, to determine 

whether the Candidate was eligible to receive additional matching funds. 
Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand @ February 28,2011 $ 0 

o Contributions from Individuals 374,937" 

o Matching Funds Received 351,961' 

o Contributions from the Candidate 25,100 

o Loans Received from the Candidate 24,900 

0 Offsets to Operating Expenditures 3,997 

Total Receipts $780,895 

o Operating Expenditures 671,827 

o Loan Repayments 4,900 

o Contribution Refunds 30,412 

Total Disbursements $707,139 

Cash-on-hand @ Juiy 31,2012 $ 73,756 

' BRFP received approximately 5,900 contributions from more than 5,890 individuals. 

^ As of the Candidate's date of ineligibility on May 31,2012, BRFP had received matching funds in the 

amount of S285,470. BRFP received an additional $66,491 on July 5,2012, for a total of $351,961. 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Net Outstanding Campaign Obligations 

The Audit staffs review of BRFP's financial activity through December 31,2013, and 

estimated winding down costs indicated that the Candidate did not receive matching fund 

payments in excess of his entitlement (For more detail, see p.S.) 

Finding 2. Reporting of Debts and Obligations 

During audit fieldwork, the Audit staff identified debts totaling $42,097 that were not 

disclosed on Schedule D-P (Debts and Obligations) as required. Subsequent to the exit • 

conference, BRFP clarified die public record with respect to these debts. The Audit staff 

recommends that BRFP provide any additional comments it feels necessary with respect 

to this matter. (For more detail, see p.7.) 
Part IV 

Findings and Reconunendations 

Finding 1. Net Outstanding Campaign Obligations 

Summary 

The Audit staff's review of BRFP's financial activity through December 31,2013, and 

estimated winding down costs indicated that the Candidate did not receive matching fund 

payments in excess of his entitlement. 

Legal Standard 

A. Net Outstanding Campaign Obligations (NOCO). Within IS days after the 

candidate's date of ineligibility (see definition below), the candidate must submit a 

statement of "net outstanding campaign obligations." This statement must contain, 

among other things; 

• The total of all committee assets including cash on hand, amounts owed to the 

committee and capital assets listed at their fair market value; 

• The total of all outstanding obligations for qualified campaign expenses; and 

• An estimate of necessary winding-down costs. 11 CFR §9034.S(a). 

B. Date of Ineligibility. The date of ineligibility is whichever of the following dates 

occurs Brst: 

• The day on which the candidate ceases to be active in more than one state; 

• Hie 30th day following the second consecutive primary in which the candidate 

receives less than 10 percent of the popular vote; 

• The end of the matching payment period, which is generally the day when the 

party nominates its candidate for the general election; or 

• In the case of a candidate whose party does not make its selection at a national 

convention, the last day of the last national convention held by a major party in 

the calendar year. 11 CFR §§9032.6 and 9033.S. 

C. Qualified Campaign Expense. Each of the following expenses is a qualified 

campaign expense. 

• An expense that is: 

o Jncuired by or on behalf of the candidate (or his or her campaign) during the 

period beginning on the day the individual becomes a candidate and 

continuing throu^ the last day of the candidate's eligibility under 11 CFR 

§9033.5; 

o Made in connection with the candidate's campaign for nomination; and 

o Not incurred or paid in violation of any federal law or the law of the state 

where the expense was incurred or paid. 11 CFR §9032.9. 

• An expense incurred for the purpose of determining whether an individual should 

become a candidate, if that individual subsequently becomes a candidate, 

regardless of when that expense is paid. 11 CFR §9034.4. 
• An expense associated with winding down the campaign and tenninating political 

activity. 11 CFR §9034.4(a)(3). 

D. Entitlement to Matching Payments after Date of Ineligibility. If, on the date of 

ineligibility (see above), a candidate has net outstanding campaign obligations as defined 

under 11 CFR §9034.5, that candidate may continue to receive matching payments 

provided that he or she still has net outstanding campaign debts on the day when the 

matching payments are made. 11 CFR §9034.1(b). 

Facts and Analysis 

The Candidate's date of ipeligibility (DOT) was May 31,2012. The Audit staff reviewed 

BRFP's financial activity through December 31,2013, analyzed estimated winding down 

costs and prepared the Statement of Net Outstanding Campaign Obligations that appears 

below. 

Buddy Roemer for President, Inc. 

Statement of Net Outstanding C^paign Obiigationa 

As of May 31,2012 

Prepared December 31,2013 

^mets 

Cash in Bank $ 38,987 

Accounts Receivable 

Total Assets $ 39,141 

LlabiMties 

Accounts Payable for Qualified Campaign Expenses at 3/31/12 $ 2,547 

Winding Down Costs: 

Actual Winding Dovm Expenses Paid (6/1/12 -12/31/13) 103,304 

Estimated Winding Down Costs (1/1/14 - 9/30/14) 34,650 fal 

Total LiabOities 140.501 

Net Outstanding Campaign Obligations (Deficit) as of May 31,2012 S (101.3601 

[a] Estimated winding down costs will be conqiared to actual mnding down costs and adjusted 

accordingly. 
Shown below are adjustments for funds received after the Candidate's DOI. 

Net Outstanding Campaign Obligations (Deficit) as of May 

31,2012 

($101,360) 

Less: Contributions Received (June 1,2012 to July S. 2012) 24S 

Less: Matching Ftinds Received July S, 2012' 66,491 

Remaining Net Outstanding Campaign Obligations 

(Deficit) as of July 5,2012 

$(34,624) 

As presented above. BRFP has not received matching fund payments in excess of its 

entitlement. 

Audit staff presented a preliminary NOCO statement and related work papers to both 

BRFP representatives at the exit conference. A brief discussion ensued with the BRFP 

representatives. Audit staff subsequently provided a revised NOCO statement to BRFP's 

representative, who stated that the workpapers would be reviewed and he would provide 

any additional comments as necessary. 

Preliminary Audit Report Recommendation 

The Audit staff recommends that, within 60 calendar days of service of this report, BRFP 

demonstrate any adjustments it believes are required in connection with any part of the 

NOCO statement or provide any other additional comments. 

I Finding 2, Reporting of Debts and Obligations 

Sunuuary 

During audit fieldwork, the Audit staff identified debts totaling $42,097 that were not 

disclosed on Schedule D-P (Debts and Obligations) as required. Subsequent to the exit 

conference, BRFP clarified the public record with respect to these debts. The Audit staff 

recommends that BRFP provide any additional comments it feels necessary with respect 

to this matter. 

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) and 104.11(a). 

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

owed by and to the committee with a statement explaining the circumstances and 

conditions under which each debt and obligation was incurred or extinguished. 

11 CFR 1104.11(a). 

BRFP's last matching fund payment was deposited on July S, 2012. 
8 

C. 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 disdosed in the report that covers the date on 

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

Facts and Analysis 

During audit Hddwork, the Audit staff reviewed disbursement records and disdosure 

reports for proper reporting of debts and obligations. BRFP reported no debt during the 

audit period; however, the review identified debts totaling $42,097'to five vendors that 

BRFP should have disclosed on Schedule D-P. Based on the records, these five vendors 

provided mainly legal services, website development, and consulting services. Most of 

the identified debts were greater than $500 and all remained outstanding during the 

reporting period in which they were incurred. These debts were outstanding for periods 

raiiging from 31 to 238 days. Further, debts totaling $15,737 were paid within 40 days of 

the invoice date. 

Preliminary Audit Report & Audit Division Recommendation 

The Audit staff discussed the reporting of debts and obligations with BRFP 

representatives at an exit conference and provided a schedule detailing the transactions 

requiring disclosure via email prior to the exit conference. During the exit conference, 

BRFP representatives indicated amendments would be filed during the post-exit 

conference response period. Subsequent to the exit conference, BRFP darified the public 

record with respect to these debts and obligations. 

The Audit staff recommends that, within 60 calendar days of service of this report, BRFP 

provide any additional comments it feels necessary with respea to this matter. 

' Each debt in this amount was counted once even if it required disclosure over multiple periods. In order 

for BRFP to cotiectiy file amended reports, schedules were provided that included the amount of each 

debt required to be reported for eadi reporting period.