Draft Final Audit Report of the 

Audit Division on the 

National Right to Life Political 

Action Committee 

January 1, 2007 - Decembei; 31, 2008 

/ y 

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 <y~^.. \ 

threshold requirements ^ 

for substantial.— — 

compliance-'^ith the,^ 

Act.' The'audit ' 

detemiines^whether the 

committeescomplied 

with the limitations, 

prohibitions andv^ 

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 National Right to Life Political Action^Committee is a separate 

segregated fund of the NatipnalsRijght to Life.pbinmittee and is 

headquartered in Washin^^D'd. For more infohnation, see the 

chart on the Committee Organizati^, p. 2. 

Financial Activity (p. 2)) \ 

• Receipts \ 

o Froinlndividuals \.\ ^ 

o Froii^Other Political Committees 

o Offsets\to.dperatingExpenditurOs 

Total Receipts^ " 

\ 

^"Disbursements y 

XO ^Operating Expenditures 

o\, independent Expenditures 

\ Oy' (Contributions to d&ier Committees 

$ 3,662,627 

9,850 

4,051 

$3,676,528 

$ 567,680 

2,804,925 

13,750 

XyTotai $3,386,355 Disbursements 

\ <;.^ 

Findiligs and Recommendations (p. 3) 

. Mi^t^t^ent of Financial Activity (Finding 1) 

Disclpsure of Occupation and Name of Employer (Finding 2) 

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

Audit Division on the 

National Right to Life Political 

Action Committee 

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

Part I. Background 

Authority for Audit 

Scope of Audit 

Limitations 

Part II. Overview of Committee 

Committee Organization 

Overview of Financial Activity 

Part III. Summaries 

Findings and Recommendations 

Part IV. Findings and Recommendations 

Finding 1. Misstatementof Financial Activity \ «^ 

Finding 2. Disclosure of Occupation>ahd.Name of Empl6yer\ 

Page 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the National Right to Life Political Action Committee 

(NRL PAC), 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 pursu^^tjtct^ 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. §^4. Prior to 

conducting any audit under this subsection, the Commission mustperfprm an intemal 

review of reports filed by selected committees to detemiine^^the report* filed by a 

particular committee meet the threshold requirement^/^for ^substantial coi];ipliance with the 

Act. 2 U.S.C. §438(b). / / \ \ . 

Scope of Audit \ \ /y^^^ </' 

Following Commission-approved procedures, the Au^ sta[fir evaluated various risk 

factors and, as a result, this audit examined: \ \ 

1. the disclosure ofdisbursements,dpbts and obligations; \ \^ 

2. the disclosure of individual contributors' occu^tion and hame 'df employer; 

3. the consistency between reported fi^uSrcs and.bank^^records;^'^ 

4. the completeness of records; and \ \ 

5. other committee op^afidn^ecessary tq^the review. ^ 

Limitations:^ \^ 

In maintaining its dis1?wsemen^ records, NRL PAdisatisfied the minimum recordkeeping 

requirements of 11 CFR^l02v9.^1Iowever,^ documentation, such as invoices and 

broadcast station Affidavits, w^ nofSvailable for review. In order to determine whether 

or not debts an(i ob|igationsVjpre. paid in a timely manner or should have been reported as 

debts,N^e Audit staff^needed to'^ee^tdd invoices. The invoice dates would indicate 

when the^debt was incuireil and whether it was required to be reported under 11 CFR 

§104.11. ^ x \ ^ ^ 

\ ^ 

Similarly, in^ordler^to detjspiine if notices of independent expenditures were required to 

be filed under M^CF|L'§.104.4, the Audit staff needed to see invoices or broadcast station 

affidavits that containe'^ the dates of dissemination of these independent expenditures. 

Without the prope/documentation disclosing those dates of dissemination, the Audit staff 

was unable to ensure that all notices of independent expenditure were filed timely. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration July 12,1979 

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

Headquarters Washington, Dj2 ^..N, 

Bank Information / , \ 

• Bank Depositories One / / \ 

• Bank Accounts Twox W \ \ 

Treasurer / / ^ \ \ 

• Treasurer When Audit Was Conducted ^/Z^ ^Carol Tobias (October 29^20O9/ June 

s^>2011)^\ ) / 

Jb^h/M<^Landrum (June it), 2011 -

Pr^nt)\ 

• Treasurer During Period Covered by"Audit Amari^'^^atividad 

(January l>i607_^September 3,2008) 

"Carol Tobia^ / 

^ (S^tembei: 4';;^008 - December 31, 

''20&8)N / 

y ^ . \ \ ./ 1/ 

Management Inforiiia'tion \ \ \ 

• Attended FEC^Gainpaign Finance Seminar \ ^ 

• Who Handled Accounting aiid^ ^-..^ y, 

Recordkeeping.Tasks\ — ' Z'^ 

'Paid staff 

Overview prFinancial Activity 

\ 

Cash-on-hand.^ January l}, 2007 

(Audited Amounts) 

$481.805 

Receipts \ ^\ ML 

o From Individuals, \y / $ 3,662,627 

o From Other PoliticatCommittees 9,850 

o Offsets to Operating Expenditures 4,051 

Total Receipts $ 3,676.528 

Disbursements 

o Operating Expenditures $ 567.680 

o Independent Expenditures 2,804,925 

o Contributions to Other Committees 13,750 

Total Disbursements $ 3.386.355 

Cash-on-hand @ December 31,2008 $ 771,978 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of NRL PACs reported figures^With bank records revealed 

a misstatement of receipts and cash-on-hand in 2007 and disbursements'aiid^.cash-on-hand in 

2008. In 2007, NRL PAC overstated beginning cash-on-hand byj>\30,932, understated receipts 

by $29,624 and overstated ending cash-on-hand by $104,632^In^2b(^iS^NRL PAC overstated 

disbursements by $1,437,635 and understated the ending cash-ron-hand^by $1,300,378. In 

response to the Interim Audit Report recommendation, ^}RI>^C filed amended reports, 

properly disclosing 2007 and 2008 activity. The NRI/P'Xc tteasurer stated^tiiaVl^RL PAC 

would reconcile its most recently reported cash bala^ice and amend its cash balance on>the next 

disclosure report filed. ^^^^'X.^v y \ ^ ) 

In addition, the original reports filed by NRL PAC for 2007^d 2008 revealed an overstatement 

of disbursements in the amount of $687,^536.^NRL PAC did n^t^ubmit any additional 

information or written comments in resp^ns^eto^thelnterim Audit Report. 

(For more detail, see p. 4) ^"^^ \ 

\ \ %>\_.^ ' 

Finding 2. Disclosure of Occu'iiation stnd Kame of Employer 

During audit fieldwork,preview of^contributiohsvfrom individuals revealed that 1,044 

contributions totaling'$ 146,115 lacked disclosure^^f the contributor's occupation and/or name of 

employer. In addition, N^L PAC^did not document "best efforts" to obtain, maintain and submit 

information for most of tiiese'cpntributions^In response to the Interim Audit Report 

reconmiendationrNRI^AC-^led^am^ disclosing additional information received 

from contributors.- (For more ^etail^see p. 7r~ 

y \ \ 

\ \ y 

\ 

\ 

\ 

V 
Part IV 

Findings and Recommendations 

I Finding 1. Misstatement of Financial Activity | 

Summary 

During audit fieldwork, a comparison of NRL PAC*s reported figures with bank records revealed 

a misstatement of receipts and cash-on-hand in 2007 and disbursements andjcash-on-hand in 

2008. In 2007, NRL PAC overstated beginning cash-on-hand by^$l3^,932, understated receipts 

by $29,624 and overstated ending cash-on-hand by $104,632. Jn.2008>NRL PAC overstated 

disbursements by $1,437,635 and understated the ending cash.-on- ha^d>y.$l,300,378. In 

response to the biterim Audit Report recommendation, NRLSPA^ filed amended reports, 

properly disclosing 2007 and 2008 activity. The NRLJJ^C freasurer stated that NRL PAC 

would reconcile its most recently reported cash balance and amend its cash balan^ie^njthe next 

disclosure report filed. <^^^^\ ^ y'^ 

W / A y 

In addition, the original reports filed by NRL PAC for 2007 and 2008 revealed an overstatement 

of disbursements in the amount of $687,'.53i^. NRL PAC did^^ot^submit any additional 

information or written comments in response'to^the Interim Audit^eport. 

Legal Standard \ \ \ ^ y 

Contents of Reports. Each report must disclpse^Z/^'-v^ ""^^ 

• the amount of cash-on-^Hand aitsthe beginning'and end of tiie reporting period; 

• the total amount of fcCeipte^fqf the reporting^eriod and for the calendar year; 

• the total amoun|;bf4i^bursemeni^s for the repor|ing.period and for the calendar year; and 

• certain transactions th^ requir^ itemization on Schedule A (Itemized Receipts), Schedule B 

(Itemized Disbursements) ^ Scitiedulo^'(Itemized Independent Expenditures). 2 U.S.C. 

§434(bXl«2)43).--(4)ai^d<5k 

yy \ \ \ \ 

Facti( and Analysis \ \ \ / \ ^ l"" A. Misstatement of Activity on Aniended Reports as Compared with Bank Records 

: /' 

1. Facts \ N.^ / / 

During audit fieldwbrlvThe Audit staff reconciled reported activity with bank records for 

calendar years 2007 and 2008. The following charts outiine the discrepancies for the 

beginning and endiiig cash balances, receipts and disbursements for each year. Succeeding 

paragraphs address the reasons for the misstatements, if known. 
2007 Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1,2007 

$612,737 $481,805 $130,932 

Overstated 

Receipts $53,518 $83,142 $29,624 

Understated 

Disbursements $102,265 $105,589 ^ $3,324 

\ Understated 

Ending Cash Balance 

@ December 31,2007 

$563,990 $459,358'<^ " $104,632 

Overstated 

The overstatement of the begirming cash-on-hand b^$130,^^32 likely^esulted from prior 

period discrepancies. /^'^~ ^ \^\ ^ 

The understatement of receipts resulted from;1^e following^. ^ \^/^ 

• Bank interest not reported \^\//~ ^ ^14,771 

• Vendor refimds for radio ads not reported <^ 4,051 

• Unexplained difference \^\ v 10.802 

Understatement of receipts \ \ \ \ ^ $ 29.624 

The misstatements described above restiited in'"a.$ 104^6^2 overstatement of the ending 

cash-on-hand. \ \ yv^"^\ "P 

2008 Activity/ \ W 

Reported \. vBank Records Discrepancy 

Beginning Cash Balance^/. 

@ Janugry~i;2008 ^ \ \ 

•^--$56^,99,0'; $459,358 $104,632 

Overstated 

Recfeipis 

/ ( \ 

$3,626,011 $3,593,386 $32,625 

Overstated 

DislTursements \ ) $4,718,401 $3,280,766 $1,437,635 

Overstated 

Ending^Cash Balance 

@ Deceniber 3,1,2008 

$(528,400) $771,978 $1,300,378 

Understated 

\y7y 

The overstatement ^^disbursements resulted from the following: 

• Unreported diibursements 

• Disbursements to printing vendor reported twice 

• Over-reported disbursements 

• Unexplained difference 

Net overstatement of disbursements 

$ 184,070 

(1,526,656) 

(80,357) 

(14.692) 

$1.437.635 

The duplicate reporting of $1,526,656 in disbursements to the printing vendor was due to 

incorrect reporting of independent expenditures. NRL PAC paid for these independent 
expenditures in advance of the dissemination dates. NRL PAC should have reported 

these advance payments on Schedule B, Line 21b, as operating expenditures. Once the 

committee distributed the printed materials, it should have subtracted the amounts of 

these expenditures from Line 21b and reported them as independent expenditures on 

Schedule E. NRL PAC correctly reported these expenditures on Line 21b when the 

payments were made, then correctly disclosed the independent expenditures on Schedule 

E upon dissemination of tfae materials. However, NRL PAC failed to subtract the amount 

of tfae independent expenditures from Line 21b. 

/ \ 

The misstatements described above resulted in a $1,300,378 und^sta^ment of the ending 

cash-on-hand. 

2. Interim Audit Report & Audit Division Recommendation ^ 

The Audit staff discussed tiie misstatements for 2007/^s2b08 witii N^PAC 

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

detailing the misstatements. NRL PAC representatives stat^^ that the conimittee^wpuld file 

the necessary amended reports. Amended rep^s^e^by NRL PAC after the^exit 

conference corrected some, but not all, of the misstatemen^./^^ ^ 

Tfae Interim Audit Report recommei^d-tfaat NRL PAC: 

• amend its reports to correct ^^ims^tatements notedN^ve;> 

• reconcile tfae casfa balance on its^nibst^^ej^ntreport to identify any subsequent 

discrepancies tfaat could affect the^recqmrne^bd adjils^ents; and 

• adjust cash as.necessary on its most^r^ent report^tibting tfaat tfae adjustment is tfae 

result o^ri^'periqdsUlj ^ 

3. Committee'-Response to Interim Audit Report 

NRL PAC filed amended'20p^:^d'2008^epo]^'to properly disclose activity as 

recommended.~"^In-a subsequent coiiimunicaSon with tfae current NRL PAC treasurer, fae 

stated'tbaf tfie tonimittee wbul^^reconcileSe most recent cash balance and include the 

revised figure on tii'exne^t report^medjo comply with the recommendation. 

B. Misstatement of Activity Repor^d on Original Reports as Compared with Bank 

Records^.^ '\ i j 

1. Facts 

In addition to examining the most recent reports filed by NRL PAC prior to tfae audit, tfae 

Audit staff compared tfae original reports filed witfa tfae bank records and discovered a 

$687,536 overstatement of disbursements in 2007 and 2008. Tfais misstatement was largely 

due to tfae incorrect reporting of independent expenditures as noted above. 

2. Interim Audit Report & Audit Division Recommendation 

Tfae Audit staff discussed tiie misstatements for 2007 and 2008 witii NRL PAC 

representatives during tfae exit conference and provided copies of relevant work papers 

detailing tfae misstatements. 
Tfae Interim Audit Report recommended tfaat NRL PAC submit any additional information or 

written comments it considers relevant to tfae matter. 

3. Committee Response to Interim Audit Report 

NRL PAC did not submit any additional information or written comments regarding tfais 

matter. 

I Finding 2. Disclosure of Occupation and Name qf Employer | 

S«m«« y 

During audit fieldwork, a review of contributions from individuals re^e^ed tfaat 1,044 

contributions totaling $146,115 lacked disclosure of the c^ntrii;utor's dc^upation and/or name of 

employer. In addition, NRL PAC did not document "besj^e^orts" to obtaii^ maintain and submit 

information for most of these contributions. In response to tfae Interim Auditv^^ort 

recommendation, NRL PAC filed amended reports'^sclosing additional infonria^oli-r^ceived 

from contributors. "^^^K \ )\ . / 

y 

Legal Standard ^ \ \ 

A. Disclosure of Receipts. For eacfa it6ihize^contribution,'ti:\e^on^ must provide: 

tfae full name and address (includihg^zip Code) oftfae contributor or otfaer source; 

tfae name of tfae contributor's employer (if^the^contributor is-sui individual); 

tfae contributor's occupation (if the c^^tribut^/is.^individual); 

tfae election to whicfa a~contribution or loan^was designated; 

tfae date of receipt;-' ^"-^ \ \ \ ^ 

the amount;^nd . \ j \ \ 

the aggregate eiectibn cycle-to^date of all receipts (within tfae same category) from tfae 

same som;ce. 11 CF^'§§^0.1jand^^ and 2 U.S.C. §434(b)(3)(A). 

B. Best JEjfforts £nsu|[es^Com^lianc.e. Wfaen tfae treasurer of a political committee sfaows that 

^e committee used best bffortsX-^Vbetow) to obtain, maintain and submit the information 

required by tfae Act, tfae^coWnitte^'srieports and records will be considered in compliance 

witii tfie^Act. 2 U.S.C. §432(i). ^ 

\ \ 1 J 

C. Definition of>|iest £fror,ts/ Tfae treasurer and tfae committee will be considered to faave used 

"best efforts" i^the cpinimttee satisfied all of tfae following criteria: 

• All written solicitations for contributions included: 

o a clear requ'^t for the contributor's full name, mailing address, occupation, and name 

of employer; and 

o tfae statement tfaat sucfa reporting is required by Federal law. 

• Witfain 30 days of receipt of the contribution, the treasurer made at least one effort to 

obtain the missing information, in eitfaer a written request or a documented oral request. 

• Tfae treasurer reported any contributor information tfaat, altfaougfa not initially provided by 

tfae contributor, was obtained in a follow-up communication or contained in tfae 

committee's records or in prior reports tfaat tfae committee filed during tfae same two-year 

election cycle. 11 CFR §104.7(b). 
Facts and Analysis 

A. Facts 

A review of itemized contributions from individuals revealed that 1,044 contributions totaling 

$145,615, or 29 percent, of the dollar value of individual contributions itemized by NRL PAC, 

lacked disclosure of tfae contributor's occupation and/or name of employer. NRL PAC disclosed 

most of tfaese contributions witfa the notation "requested" or "Information Requested." 

For 708 of these contributions totaling $92,416, tfae committee provided no evidence tfaat it faad 

exercised "best efforts" to obtain, maintain and submit tfae informatio^rl^is represents tfae 

majority of tfae individual contributions lacking tfae required information. For the remaining 336 

(1,044 - 708) contributions totaling $53,699, NRL PAC obtaineii the^i^quired information. It 

did not, faowever, amend its reports to disclose tfae additional mformation/ 

B. Interim Audit Report & Audit Division Recomniendation 

Tfae Audit staff presented tfais matter to NRL PAC rq)fesentati'Yes at the exit cbnfe^rence, along 

with the appropriate work papers. In response, NRL.PAC counsel, stated tfaat appropriate 

amended reports would be filed. Amended reports filed^y^NRXrPAC after tfae exif conference 

reduced tfae dollar value of errors to $136,330, or 27 percent oftfae dollar value of individual 

contributions itemized by NRL PAC. ^-^^ \ \ 

Tfae Audit staff recommended tfaat NRL PX ^ takelhe.foUowing actions: 

• provide documentation that it exercised besbef^ts.tp obtain, maintain and submit tfae 

required contributor information; or "/ ^ 

• make an effort to'con^c^those indiviauals lacking tiie required contributor information 

and provide d($qumentatipn^of such efforts (such as copies of letters/emails to the 

contributor^aqd/Or^honeiJgs); and \^ 

• file amended Sch^ules^A (Itemized Receijpts) to disclose contributor information in 

NRL.PAC'^.possession ais well as coiitribiitor information obtained in response to this 

recpmmendaliGin, ^ ^ "^-/ 

C. poinmittee Response-^o Interim Aipdit Report 

In respons^ NRL PAC filed^atiiende^Scfaedules A that materially corrected the missing 

contributor infoimation. \ j