Draft Final Audit Report of the 

Audit Division on the Utah State 

Democratic Committee 

(January 1, 2011 - December 31, 2012) 

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 hav^et 

the threshold 

requirements 

substanti " "** 

with thi 

determines 

committee 

the limitations, 

prohibitions and 

disclosure requiremen 

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. 3) 

The Utah State Democratic Committee is a state party committee 

headquartered in Salt Lake City, Utah. For more information, see 

the chart on the Committee Organization, p. 3. 

Financ 

• Receii 

o 

ty (p. 4) 

itions fPEte Individuals 

ibutions froi^aher Political 

(PACs)^ 

Affiliate^pher Party 

Nonfederal Accounts 

semer 

^ng Expenditures 

I Election Activity 

brdinated Party Expenditures 

Other Disbursements 

Transfers to AfEliated/Other Party 

Committees 

Total Disbursements 

• Levin Receipts 

• Levin Disbursements 

S 448,066 

206,626 

771,602 

550,073 

119,872 

S 2,096,239 

$1,119,344 

709,716 

134,156 

67,902 

65,000 

$2,096,118 

$104,500 

$103,500 

Findings and Recommendations (p. S) 

• Misstatement of Financial Activity (Finding 1) 

• Recordkeeping for Employees (Finding 2) 

• Improper Bank Account Structure (Finding 3) 

• Receipt of Levin Fund Donations that Exceed the Limit (Finding 4) 

• Receipt of Contributions that Exceed Limits (Finding 5) 

' 52 U.S.C. §30111(b). 
Draft Final Audit Report of the 

Audit Division on the Utah 

State Democratic Committee 

(January 1, 2011 - December 31, 2012) 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 

Scope of Audit 

Commission Guidance 

Part II. Overview of Committee 

Committee Organization 

Overview of Financial Activity 

Part III. Summaries 

Findings and Recommendations 

Part IV. Findings and Re 

Finding]. Misstatement of Fin 

Finding 2. Recordkeeping for Emp 

Finding 3. Improper Bank^count S 

Finding 4. Receipt of Levirt^ad Donatii 

Finding S. Receipt of Contri 

Exceed the Limit 

Limits 

3 

4 

7 

9 

11 

13 

15 
Part I 

Background 

Authority for Audit 

This report is based on an audit of the Utah State Democratic Committee (USDC), 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 52 U.S.C. §30111(b), which permits the Commission to conduct audits and 

field investigations of any political committee that is required to file a report under 52 U.S.C. 

§30104. Prior to conducting any audit under this subsection, the Commission must perform an 

internal review of reports filed by selected committees to determine if the reports filed by a 

particular committee meet the threshold requirementsJ^r substantial compliance with the Act. 

52 U.S.C. §30111(b). 

Commissi 

Request for Elarly 

Scope of Audit 

Following Commission-approved proced 

as a result, this audit examined; 

1. the receipt of excessive contributions; 

2. the receipt of contributions 

3. the disclosure of individual coni 

4. the disclosure of disbursements, 

5. the disclosure of ex! 

6. the consistency hi 

7. the completeness o: 

8. thedisclosu 

9. other co 

evaluated various risk factors and 

nanie of employer; 

non-federal accounts; 

cords; 

n Consideration of a Legal Question 

Pursuant to the CommissioiSf'^ "Policy Statement Establishing a Program for Requesting 

Consideration of Legal Questions by the Commission," several state party committees 

unaffiliated with USDC requested early consideration of a legal question raised during audits 

covering the 2010 election cycle. Specifically, 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)(l) does require committees 

to keep a monthly log for employees paid exclusively with federal funds. Exercising its 

prosecutorial discretion, however, the Commission decided it would 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. The Audit staff informed 

USDC 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 

recommendations with respect to USDC employees paid with 100 percent federal funds and 

reported as such. 
Part II 

Overview of Committee 

Committee Organization 

Important Dates 

• Date of Registration November 16,1978 

• Audit Coverage January 1,2011 - December 31,2012 

Headquarters Salt Lake City, Utah 

Bank Information 

• Bank Depositories 1 Two 

• Bank Accounts ^ l^x federal and four non-federal 

Treasurer ' 

• Treasurer When Audit Was Condu<^iS%i, ^ B^l^ng: 9/20/13-3/16/15 

Peter^^n: 3/17/15 - Present 

• Treasurer During Period Covei^^^ Audit KathleefSnyder: 1/01/11 - 10/10/11 

Robert Miller: 10/11/11-12/31/12 

Management Information^. \ 

• Attended Commissj^'^Sl^mien PiFHan^'^^Dai::! ^es 

Who Handled Ac 

Tasks 

^Recor eping Paid Staff 
Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand ® January 1,2011 $ 82,729 

Receipts 

o Contributions from Individuals 448,066 

o Contributions from Other Political Committees 

(PACs) 206,626 

o Transfers from Affiliated/Other Party Committees 771,602 

o Transfers from Nonfederal Accounts 550,073 

o Other Receipts 119,872 

Total Receipts ^ 2,096,239 

Disbursements ^ 

o OperatinK Expenditures ^ ^ 1,119,344 

o Federal Election Activity ^ 709,716 

o Coordinated Party Expenditures ^ 134,156 

o Other Disbursements - 67.902 

o Transfers to Affiliated/Other Par^jpmmittees*'^ W 65,000 

Total Disbursements 2,096,118 

Cash-on-hand ® Decemh»:.31.201A, ^ S 82,850 

Levin Cash-on-hand^^ay S|^012 ' \ SO 

Total Levin Receipts \ 104,500 

Total Levin 103,500 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

During audit fieldwork, a comparison of USDC's reported financial activity with its bank 

records found that, for 2011, USDC understated its opening cash by $17,885 and 

overstated its receipts and ending cash by $92,203 and $74,545, respectively. For 2012, 

only the opening and ending cash were misstated. Opening cash was overstated by 

$74,545 and ending cash was overstated by $75,8^ Subsequent to audit notification, 

USDC amended its reports, which materially coril^^the opening cash for 2011. In 

response to the Interim Audit Report recommgnmrioi^SDC stated that it disagrees with 

the dollar amount of the receipts misstatem^ $9^03. and requests that the finding be 

reduced by $90,439, the amount of its ^ij^^&rted^^Mfers. (For more detail, see p. 7.) 

Finding 2. Recordkeepinipfor^mplo^ 

During audit fieldwork, the staff fou^^PySDC did^Tmaintain monthly 

payroll logs for some of its pay^^s requir^^ document me percentage of time each 

employee spent in connection wiS^^ral ele^^ For 2011 and 2012, the Audit staff 

identified 42 navroll teaa^tions t^lin^^jl35^^^hich monthly payroll logs were 

missing or incomoldl^. TmTMonsisteq^ftii^^|&B^roll which was allocated between 

federal and non-f«ra^n^In resp^e to tliPfnterim Audit Report recommendation, 

USDC stated th^ it no^jgs^Macedures^j to ensure that payroll logs are 

maintainefte^vi^^e aiTMmt^^iaiie>en^ovees spent on federal activities. (For more 

detail, i 

Finding dl^toprdl^r ^nk Account Structure 

USDC maintaine^^wnk ^ount in which all funds, including both federal and nonfederal, were tempoi^^L^isferred from linked subaccounts (federal and non-federal) 

to a parent account tha^|^ed as a temporary holding account for all USDC funds. This 

account structure was maintained for ten months in 2011. The Audit staff determined the 

account was not a federal account in accordance with 11 CFR §102.5(a)(l)(i), which 

provides for the permissible account structure pertaining to federal and non-federal 

activity. Upon review of the account activity, the Audit staff concluded that USDC did 

not improperly use non-federal funds to pay for federal activity. In response to the 

Interim Audit Report recommendation, USDC stated that it has no additional comments 

regarding this matter. (For more detail, see p. 11.) 

Finding 4. Receipt of Levin Fund Donations that Exceed the 

Limit 

The Audit staff identified two donations to the Levin Fund that exceeded the donation 

limitation by $12,000. In response to the Interim Audit Report recommendation, USDC 

filed amended reports disclosing different contributors of Levin funds to replace those the 
Audit staff identified as making excessive Levin contributions. USDC did not 

demonstrate through a reasonable accounting method that it had sufficient Levin-eligible 

funds to make the Levin disbursements at the time when it spent the monies acquired 

from the two excessive donations on Levin activities and it did not demonstrate that the 

most recently disclosed Levin donations were, in fact, Levin-eligible. (For more detail, 

seep. 13.) 

Finding 5. Receipt of Contributions that Exceed Limits 

USDC accepted contributions from two political action committees that exceeded the 

limitation by $8,500. Both of the excessive contributions were refunded; however, the 

refunds were not made timely. In response to the Interim Audit Report recommendation, 

USDC stated that it has no additional comments regarding this matter. (For more detail, see 

p. 15.) 

k 
Part IV 

Findings and Recommendations 

Finding 1. Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of USDC's reported financial activity with its bank 

records found that, for 2011, USDC understated its opening cash by $17,883 and 

overstated its receipts and eliding cash by $92,20^ 

only the opening and ending cash were mis 

$74,545 and ending cash was overstated 

USDC amended its reports, which matej^ 

response to the Interim Audit Reportj 

the dollar amount of the receipts mi^ 

reduced by $90,439, the amount of its o\ 

Legal Standard 

Contents of Reports. J^h 

• the amount of 

• the total amo 

• the total amount 

and 

• cei 

SchediTI^S (Itemi 

Facts and 

$74,545, respectively. For 2012, 

ling cash was overstated by 

Subsequent to audit notification, 

the opening cash for 2011. In 

DC stated that it disagrees with 

requests that the finding be 

d of the reporting period; 

iod and for the calendar year; 

rting period and for the calendar year; 

ition on Schedule A (Itemized Receipts) or 

Its). 52 U.S.C. §30104(b)(1), (2), (3), (4) and (5). 

A. Facts 

During audit fieldwork^e Audit staff reconciled USDC's reported financial activity 

with its bank records for the calendar years 2011 and 2012 and identified misstatements 

for 2011 in its opening cash balance, receipts and ending cash balance. The following 

chart outlines the discrepancies between USDC's disclosure reports and its bank records, 

and the succeeding paragraphs explain, to the extent possible, ^e reasons for the 

misstatements. 
2011 Committee Activity 

Reported Bank Records Discrepancy 

Opening Cash Balance @ 

Januaiy 1,2011 $64,844 $82,729^ $17,885 Understated 

Receipts $477,497 $385,294 $92,203 

Overstated 

Disbursements $438,632 $458,839 $227 

Understated 

Ending Cash Balance 

^ December 31.2011 $83,709 $9,164 $74,545 

Overstated 

The overstatement of receipts resulted from the fo^jgwing: 

• Transfers from non-federal accounts o^ 

• Fidelity investment account receipts^^jve^ported 

• Unexplained difference 

Net Overstatement of Receii 

The misstatement of the opening cash 

reporting the proper opening b^nce and a1 

Subsequent to audit notification^^DC amehi 

balance for this fund, which mat 

misstatement of theeiat@feCMh ba^ce^Si^j^ 1 

cash adjustment foi^e K^^Shepb 

detailed above. 

For 2012 

ending 

discrepanci 

to correct the 

$ (90,439) 

(2,170) 

406 

;011 resu^^j^rimarilv from USDC not 

the KaiJ^hepherd Fund.^ 

its reports to adjust the opening cash 

opening cash balance for 2011. The 

primarily from the opening 

net overstatement of receipts 

balance by $74,S4S and overstated its 

The^'erstatements resulted primarily from the 

11 noted above. USDC has not flled amendments 

IS for 2012. 

B. Interim Audit Audit Division Recommendation 

At the exit conference,]^Audit staff explained the misstatements above, and other 

possible misstatements related to a bank account in which all funds, including both 

federal and non-federal funds, were temporarily transferred from linked subaccounts 

(federal and non-federal) to a parent account that served as a temporary holding account 

for all USDC funds. Schedules of the misstatements were provided to USDC 

representatives and Counsel. Counsel stated that they would review the schedules and 

The opening cash balance was adjusted to include a federal cash balance fiom USDC's parent account 

discussed in Finding 3. 

The Karen Shepherd Fund consisted of amounts originally donated from the Karen Shepherd for 

Congress Committee in I99S. During 2011, total receipts were SI,100 and there were no disbursements. 

The opening cash balance at the beginning of 2011 was $SS,620 and the closing balance at the end of 

2011 was SS6,720. These balances were included in the amendments filed by USDC after notification of 

the audit. It is also noted that USDC closed the account for the Karen Shepherd Fund in March 

2014. 
might seek Commission consideration regarding the inclusion of the parent account as a 

federal account. Subsequently, USDC filed a Request for Commission Consideration of 

a Legal Question; however, the matter was withdrawn after the Audit staff, in further 

consultation with the Office of General Counsel, decided not to include activity from the 

parent account as part of the misstatement finding, since USDC did not use the parent 

account to pay any of its expenses and it was not used as a Federal allocation account.* 

The Interim Audit Report recommended that USDC file amended disclosure reports to 

correct the remaining overstatements of ending cash and receipts for 2011 and the 

misstated cash balances for 2012. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, USDC said it disagrees that 

receipts were overstated by $92,203 and requestsj||t this amount be reduced by $90,439, 

the amount of over reported H3 transfers. USQ^^hgnds that if it had made electronic 

transfers (or written checks) from its holdiri^ro^ant and deposited them into its Federal 

account, the funds would have been retu^^Pg its^tent account by automatic transfers, 

so in effect, no transfers could have Thei^jre. it recorded the transfers on its 

books and reported them as such. 

The Audit staff maintains thaf^DC ove 

federal account and continues t^pisinimend i 

amount of funds that were actual! 

would be consistent report!^ o| 

USDC properly re^^d o^ng the ^ 

amount ^^ransfers from its non-

^SDC amend its reports to reflect the 

i^e accounts. Such an adjustment 

» between these accounts which 

iec( r Employees 

Si 

During auditIfUjdwork. ^i^udiMSTff found that USDC did not maintain monthly 

payroll logs for^^ of its^yrci^ as required, to document the percentage of time each 

employee spent in^toecti^ with a federal election. For 20II and 2012, the Audit staff 

identified 42 payroll^^^raons totaling $62,135, for which monthly payroll logs were 

missing or incomplete, '^is consisted entirely of payroll which was allocated between 

federal and non-federal funds. In response to the Interim Audit Report recommendation, 

USDC stated that it now has procedures in place to ensure that payroll logs are 

maintained to track the amount of time employees spent on federal activities. 

Legal Standard 

Maintenance of Monthly Logs. 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 percent or less of their compensated time in a given 

month on federal election activities must be paid either from the federal account 

or have their pay allocated as administrative costs; 

The patent account is the subject of Finding 3- Improper Bank Account Stiucture. 
10 

employees who spend more than 25 percent 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)(1). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed disbursements for payroll. USDC was 

required to maintain monthly logs or equivalent records to document the percentage of 

time each employee spent in connection with a federal election for $358,530 in payroll. 

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

funds used to pay employee salaries and wages. E^i some employee time records, USDC 

properly utilized a payroll log to record the tim^pai^n federal election activity. 

However, some payroll logs were either mi^m^j|,were not complete for payroll totaling 

$62,135.® The total of $62,135 consis 

and paid with an allocation of federal i 

ely dl|fflwroll reported on Schedules H4 

serai ads.' 

B. Interim Audit Report & Audit Di 

At the exit conference and dut^audit fieU 

recordkeeping issue with USDC^^jc^ntativS 

mmenc 

'k,lhe Audit .pSf discussed the payroll 

le representatives noted that most of 

the missing records wer^for 

representatives 

procedures that 

time spent on federal 

policies andgpggifiSLures 

planned glffl^es 

federal activl' 

For USDC em^ 

for which payroll 

recommended that 

lom is now deceased. The 

new employee policies and 

leets that tracked the percentage of 

of the new timesheet and a copy of the 

udit staff. The Audit staff found the 

emount of time spent by USDC employees on 

iid with an allocation of federal and non-federal funds 

issing or incomplete, the Interim Audit Report 

provide evidence that the missing or incomplete monthly time logs were 

maintained to document the percentage of time an employee spent in connection 

with a federal election; and 

continue to maintain payroll logs according to the policy provided to the Audit 

staff. 

' This total does not include payroll for employees paid with ] 00 percent federal funds and reported as 

such (see Part I, Background, Commission Guidance, Request for Early Commission Consideration of a 

Legal Question, Page 1). Payroll amounts are stated net of payroll taxes and benefits. 

' All payroll described in this finding, S3S8,S30, was required to be allocated between federal and nonfederal activity. 
11 

C. Committee Response to Interim Audit Report 

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

procedures in place to ensure that payroll logs are maintained to track the amount of time 

employees spent on federal activities. The Audit staff concludes that USDC did not 

maintain monthly logs for payroll totaling $62,13S. 

Finding 3. Improper Bank Account Structure 

Summary 

USDC maintained a bank account in which all funds, including both federal and nonfederal, were temporarily transferred from linked subaccounts (federal and non-federal) 

to a parent account that served as a temporary holding account for all USDC funds. This 

account structure was maintained for ten months in 2011. The Audit staff determined the 

account was not a federal account in accordancej^h 11 CFR §102.S(a)(l)(i), which 

provides for the permissible account structure jmaimtag to federal and non-federal 

activity. Upon review of the account activi^h^^dit staff concluded that USDC did 

not improperly use non-federal funds to feo^^activity. In response to the 

Interim Audit Report recommendatiqgjrosDbstatedOmit has no additional comments 

regarding this matter 

Legal Standard 

A. Accounts for Federal and I^^ederal^l^|^yity. A party committee that finances 

political activity in connection will^E^^eral a^|j^-federal elections may establish 

two accounts (federa^i^^n-fede^)^^lltocate|^^ expenses - expenses that 

simultaneously suj^t feo^y and nfi^rcdwi^^raon activity - between the two 

accounts. Altemativ^^die (^nmittee niay coi^ct both federal and non-federal activity 

from one I sunt. 

B. Fed^H^Non-] 

that are pern^^le undl 

funds that are i^^rmil 

contributions that e^ed thi 

prohibited sources, si 

and (a)(3). 

I federal account. 11 CFR § 102.S(a)(l)(i). 

Dunt. The federal account may contain only those funds 

Selection law. The non-federal account may contain 

ande^e federal law (but are legal under state law), such as 

I limits of the federal law and contributions from otherwise 

srporations and labor organizations. 11 CFR §102.S(a)(l)(i) 

C. Transfers. Generally, a political committee may not transfer funds from its nonfederal account to its federal account, except when the committee follows specific rules 

for paying for shared federal/non-federai election activity. 11 CFR §§102.S(a)(l)(i) and 

106.5(g). 

D. Paying for Allocable Expenses. The Commission regulations offer party committees 

two ways to pay for allocable, shared federal/non-federal expenses. 

• They may pay the entire amount of the shared expense from the federal account 

and transfer funds from the non-federal account to the federal account to cover the 

non-federal share, of that expense; or 

• They may establish a separate allocation account into which the committee 

deposits funds from both its federal and non-federal accounts solely for the 
12 

purpose of paying the allocable expenses of shared federal/non-federal activities. 

11 CFR §106.5(g)(l)(i) and (ii)(A). 

E. Reporting Allocable Expenses. A political committee that allocates federal/nonfederal expenses must report each disbursement it makes from its federal account (or 

separate allocation account) to pay for a shared federal/non-federal expense. Committees 

report these kinds of disbursements on Schedule H-4. 11 CFR §104.17(b). 

Facts and Analysis 

A. Facts 

Prior to audit fieldwork, USDC informed the Audit staff that a previous Executive 

Director had maintained a bank account that included both federal and non-federal funds, 

obtained primarily through automatic transfers (svjg|gpsj from linked subaccounts (a 

federal bank account and a non-federal bank — * * 

automatically transferred money back to th^ 

debits from the subaccounts. The effects, 

maintain zero balances in these su 

The parent account also 

unts to pay for checks and other 

rs, on a daily basis, were to 

USDC did not deposit funds directly in 

contributions, totaling $41,7 

was not used to pay bills, 

totaled $2,435. All transfers for 

transfer from a non-fo^g^coum 

was discontinued j|Ei)cto6^f 2011'!^ 

credit card process! 

r than small credit card 

led auto^Sffc transfers. The account 

associated with contributions that 

paid directly by check or internet 

The automatic sweeps function 

le parent account served only as a 

Under 11 

federal 

called an al 

expenses, 

allocation accoun 

above does not com 

i a federal account to deposit and pay all 

committee may choose to establish a special account, 

, soiS^^r the purpose of paying mixed federal/non federal 

isfe^ from the federal and nonfederal accounts into the 

allocable activity. USDC's account structure as described 

e regulations pursuant to 11 CFR § 102.5. 

The commingling of federal and non-federal funds into the parent account increased the 

risk of utilizing non-federal funds for federal activity. However, based on a funding 

analysis of all USDC's accounts, the Audit staff concluded that no overfunding of federal 

activity from non-federal accounts existed during the audit period. 

^ The parent account also received credit card contributions from both federal and non-federal 

donors, and was used to pay expenses relating to the processing fees for those credit card 

contributions. 

* Other than the linked federal sub-account, USDC did not maintain a federal account for its daily 

operational activities. 

' Of the contributions and fees mentioned in this paragraph, only S7,S17 was processed and deposited after 

October 2011; the fees totaled S16S. 
13 

B. Interim Audit Report & Audit Division Recommendation 

At the exit conference, the Audit staff discussed the improper account structure with 

USDC representatives and Counsel and it was subsequently presented as a finding. 

Counsel stated that USDC agreed that the account structure was improper and that its use 

had been discontinued. Subsequent to the exit conference, Counsel provided sufficient 

explanation to assure the Audit staff, in conjunction with their own analysis, that no 

overfunding of federal activity resulted from the commingling of federal and non-federal 

funds in the parent account. 

The Interim Audit Report recommended that USDC provide ariy additional information 

or written comments that it considered relevant to this matter. 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recomm^Mion, USDC provided no additional 

comments. The Audit staff concludes that US^^S^an account structure for ten 

months during 2011 that was not in complia^^^|h regulations pursuant to 11 CFR 

§102.5. 

Finding 4. Receipt of 

the Limit 

Summary 

The Audit staff identi 

limitation by $12,i 

filed amended refj^^discli 

Audit staff identified 

demoi 

funds tq^^e the 

from the tw^^cessive 

most recently^slosed 

ons that Exceed 

^nd that exceeded the donation 

fit Report recommendation, USDC 

[It contr^tors of Levin funds to replace those the 

/in contributions. USDC did not 

: method that it had sufficient Levin-eligible 

fthe time when it spent the monies acquired 

Evin activities and it did not demonstrate that the 

fons were, in fact. Levin-eligible. 

Legal Standard 

Party Committee Lin^^ state, district or local committee of a political party must 

not solicit or accept from any person (including any entity established, financed, 

maintained, or controlled by such person) one or more donations of Levin funds 

aggregating more than $10,000 in a calendar year. If the state limit is less than $10,000, 

the committee must adhere to that limit. 11 CFR §300.3l(d)(l)-(2). 

Levin Funds Accounts and Accounting. For Levin fund expenditures. Committees 

must either: 

• Establish a separate Levin account (in addition to the non-federal and federal 

accounts); or 

• Deposit Levin funds into the non-federal account, and demonstrate through a 

reasonable accounting method that it has sufficient Levin funds in the account to 
14 

cover any expenses allocated to Levin funds.11 CFR §§ 102.S(a)(3) and 

300.30(c). 

Facts and Anal3rsis 

A. Facts . 

USDC deposited its Levin funds into its non-federal account, and reportedly "flagged" 

(tracked) its donations. It later transferred these Levin donations, as needed, into its 

Levin account. During the audit period, USDC made two lump-sum transfers from its 

non-federal account into its Levin account, in anticipation of making Levin 

disbursements. The Audit staff reviewed these donations and identified two donations in 

2012 that exceeded the Levin donation limit. 

USDC exceeded the Levin donation limit by $j 

limits for Levin fund donations; therefore, i 

calendar year should have been followed^^PIp d^ 

and exceeded the donation limit by SSJjlaullNhe oti 

$14,000, and exceeded the donatiom^^t by $4,000. 

The Audi; 

amend: 

information 

errors. 

Utah state law does not address 

limit of $10,000 per donor in a 

ade donations totaling $18,000, 

nor made donations totaling 

B. Interim Audit Report & 

At the exit conference, the Ai 

who replied that Levin funds wi 

Levin account, and AgH^^ause o 

disclosed. USDCMfiPOS^biendinl 

donors. 

imends 

is matter with USDC representatives 

SDC's non-federal account to its 

ir, tm^rong Levin donors were 

Isclose different Levin eligible 

nee of General Counsel, agreed that the 

ssue or%xcessive Levin donations, but sought more 

fiod utilized and the related clerical disclosure 

The Interim Audit Rl^|g^ommended that USDC provide evidence these donations 

were not excessive or through a reasonable accounting method that total Levin 

funds were sufficient and that the proposed substitute Levin donors were Levin eligible at 

the time Levin expenditures were made. Absent such action, USDC should refund the 

$12,000 in excessive donations and provide evidence of such refunds (to include copies 

of the front and back of the cancelled checks). 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, USDC stated that it would file 

amendments within 30 days to disclose different Levin eligible donors, which it has since 

done. However, no information was provided regarding USDC's accounting method to 

demonstrate that total Levin funds were sufficient and that the proposed substitute Levin 

donors were Levin eligible at the time Levin expenditures were made. 

10 Levin funds cannot be deposited Into a federal account. 
15 

The Audit staff agrees the amendments filed for the excessive Levin amount is sufficient 

as long as associated records are provided that show the adequacy of Levin Funds and the 

eligibility of Levin donors. 

Finding 5. Receipt of Contributions that Exceed Limits 

Summary 

USDC accepted contributions from two political action committees that exceeded the 

limitation by $8,500. Both of the excessive contributions were refunded; however, the 

refunds were not made timely. In response to the Interim Audit Report recommendation, 

USDC stated that it has no additional comments regarding this matter. 

Legal Standard 

A. Party Committee Limits. A state, district ( 

not receive more than a total of $5,000; 

political committee. 52 U.S.C. §301U 

B. Handling Contributions That Apj 

contribution that appears to be i 

• Return the questionable i 

• Deposit the check into Jts federal i 

o Keep enough me 

o Keep a written: 

o Include 

iter 

Facts and 

committee of a political party may 

year from a multicandidate 

nd 11 CFR§110.2(d). 

If a committee receives a 

must either: 

cover an' potential refunds; 

the contribution may be illegal; 

the contribution has to be 

of the excessive portion, following 

immission regulations; and 

a proper reattribution or redesignation 

ng the excessive contribution, refund the 

donor. 11 CFR §103.3(b)(3), (4) and (5). 

A. Facts 

USDC accepted contrirations from two multicandidate political action committees that 

exceeded the limitation by $8,500. One of the contributions was made in 2011 for 

$10,000 and the other was made in 2012 for $8,500, resulting in excessive contributions 

of $5,000 and $3,500, respectively. Both of the excessive contributions were refunded; 

however, the refunds were not made timely (refunds were made 129 days and 373 days 

later, respectively). 

B. Interim Audit Report & Audit Division Recommendation 

Subsequent to the exit conference, the Audit staff presented this matter to USDC 

representatives. USDC acknowledged the errors and noted that they had addressed them. 

The Interim Audit Report recommended that USDC provide any additional comments it 

considered relevant to this matter. 
16 

C. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, USDC made no additional 

comments. The Audit staff concludes that USDC accepted contributions that exceeded 

the limitation by $8,500 and the funds were untimely refunded.