FEDERAL ELECTION COMMISSION 

WASHINGTON. D.C. 20463 

November 14, 2008 

Mr. W. R. Eissler, Treasurer 

Brady for Congress 

P. O. Box 8277 

The Woodlands, TX 77387 

Dear Mr. Eissler: 

Attached, please find the Report of the Audit Division on Brady for Congress 

The Commission approved this report on November 6,2008. 

The Commission approved Final Audit Report will be placed on the public record 

on November 21,2008. Should you have any questions regarding the public release of 

this report, please contact the Commission's Press Office at (202) 694-1220. 

Any questions you may have related to matters covered during the audit or in the 

report should be directed to Philomena Brooks or Martin Favin of the Audit Division at 

(202) 694-1200 or toll free at (800) 424-9530. 

Sincerely, 

.»:tlmr/4L.Cff·~ Wanda J. Thomas 

Acting Assistant Staff Director 

Audit Division 

Attachment as stated 
Report of the 

Audit Division on 

Brady for Congress 

January 1, 2005 - December 31,	 2006 

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. I 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. 

2 U.S.c. §438(b). 

About the Campaign (p. 2)
 

Brady for Congress is the principal campaign committee for
 

Kevin Brady, Republican candidate for the U.S. House of
 

Representatives from the state of Texas, 8th District, and is
 

headquartered in The Woodlands, Texas. For more information,
 

see the chart on the Campaign Organization, p. 2.
 

Financial Activity (p. 2) 

•	 Receipts 

o From Individuals	 $ 112,706 

o From Political Committees	 398,590 

o Total Receipts	 $ 511,296 

•	 Disbursements 

o	 Operating Expenditures & Other 

Disbursements $ 578,343 

5,000 

1,000 

o	 Other Disbursements 

o	 Refund of Contribution 

o	 Total Disbursements $ 584,343

Finding and Recommendation (p. 3) 

•	 Misstatement of Financial Activity 

I 
Table of Contents 

Page 

Part I. Background 

Authority for Audit 1
 

Scope of Audit 1
 

Part II. Overview of Campaign
 

Campaign Organization 2
 

Overview of Financial Activity 2
 

Part III. Summary 

Finding and Recommendation 3
 

Part IV. Finding and Recommendation 

Misstatement of Financial Activity 4
 
1 

Part I 

Background 

Authority for Audit 

This report is based on an audit of Brady for Congress (BFC), 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 filed by selected committees to 

determine if 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, the scope of this audit was limited to the following: 

1. The disclosure of occupation/name of employer regarding individual contributions. 

2. The consistency between reported figures and bank records. 
2 

Part II 

Overview of Campaign 

Campaign Organization 

Important Dates Brady for Congress 

• Date of Registration 1anuary 24, 1997 

• Audit Coverage 1anuary 1, 2005 - December 31, 2006 

Headquarters The Woodlands, Texas 

Bank Information 

• Bank Depositories One 

• Bank Accounts One Checking account 

Treasurer 

• Treasurer When Audit Was Conducted W.R. Eissler 

• Treasurer During Period Covered by Audit W.R. Eissler 

Management Information 

• Attended FEC Campaign Finance Seminar Yes (2007) 

• Used Commonly Available Campaign 

Management Software Package 

Yes 

•	 Who Handled Accounting and Volunteer Staff 

Recordkeeping Tasks 

Overview of Financial Activity 

(Audited Amounts) 

Cash on hand @ Januarv 1, 2005 $ 103,868 

Receipts 

0 From Individuals $ 112,706 

0 From Other Political Committees 398,590 

Total Receipts $ 511,296 

Disbursements 

0 Operating Expenditures $ 578,343 

0 Other Disbursements 5,000 

0 Refund of Contribution 1,000 

Total Disbursements $584,343 

Cash on hand @ December 31,2006 $ 30,821 
3 

Part III 

Summary 

Finding and Recommendation 

Misstatement of Financial Activity
 

A comparison of BFC's reported figures to its bank records revealed that in 2005,
 

beginning cash on hand, receipts and ending cash on hand were overstated by $18,542,
 

$1,100, and $57,024 respectively, and disbursements were understated by $37,382.
 

In 2006, beginning cash on hand, receipts, and ending cash on hand were overstated by
 

$57,024, $3,400 and $79,668 respectively, and disbursements were understated by
 

$19,244. The Audit staff recommends that BFC amend its disclosure reports to correct
 

the misstatements. In response, BFC materially corrected the misstatements. (For more
 

detail, see p.4)
 
4 

Part IV
 

Finding and Recommendation
 

IMisstatement of Financial Activity 

Summary 

A comparison of BFC's reported figures to its bank records revealed that in 2005,
 

beginning cash on hand, receipts and ending cash on hand were overstated by $18,542,
 

$1,100, and $57,024 respectively, and disbursements were understated by $37,382.
 

In 2006, beginning cash on hand, receipts, and ending cash on hand were overstated by
 

$57,024, $3,400 and $79,668 respectively, and disbursements were understated by
 

$19,244. The Audit staff recommends that BFC amend its disclosure reports to correct
 

the misstatements. In response, BFC materially corrected the misstatements.
 

Legal Standard
 

Contents of Reports. Each report must disclose:
 

•	 The amount of cash on hand at the beginning and end of the reporting period; 

•	 The total amount of receipts for the reporting period and for the election cycle; and 

•	 The total amount of disbursements for the reporting period and for the election cycle; 

and 

•	 Certain transactions that require itemization on Schedule A (Itemized Receipts) or 

Schedule B (Itemized Disbursements). 2 U.S.c. §434(b)(I), (2), (3), (4) and (5). 

Facts and Analysis 

The Audit staff reconciled BFC's reported financial activity to its bank records for 

calendar years 2005 and 2006. The following charts outline the discrepancies for the 

beginning cash balance, receipts, disbursements and the ending cash balance for each 

year. Succeeding paragraphs address the reasons for the misstatements. 

2005 Activity 

Reported . Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1,2005 

$122,410 $103,868 $18,542 

Overstated 

Receipts $181,848 $180,748 $1,100L 

Overstated 

Disbursements $148,710 $186,092 $37,382 

Understated 

Ending Cash Balance 

@ December 31, 2005 

$155,548 $98,524 $57,024 

Overstated 

2 Unitemized amount over reported. 
5 

The $18,542 overstatement of beginning cash on hand could not be explained but most 

likely resulted from prior period errors. 

The net understatement of disbursements resulted from the following: 

• Disbursements not reported $37,682 

• One disbursement reported twice (235) 

• Payment reported but not supported by a check or debit ( 65) 

• Net Understatement of disbursements $37,382 

The $57,024 overstatement of ending cash on hand resulted from the unexplained cash 

differences as well as the disbursement misstatement noted above. 

2006 Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance 

@ January 1,2006 

$155,548 $98,524 $57,024 

Overstated 

Receipts $333,948 $330,548 $3,4003 

Overstated 

Disbursements $379,007 $398,251 $19,244 

Understated 

Ending Cash Balance 

@ December 31, 2006 

$110,489 $30,821 $79,668 

Overstated 

The overstatement of beginning cash on hand was the result of the errors described 

above. 

The understatement of disbursements resulted from the following: 

• Disbursements not reported $19,217 

• A disbursement under reported 27 

• Understatement of Disbursements $19,244 

As a result of the misstatements detailed above, the ending cash on hand for 2006 was 

overstated by $79,668. 

At the exit conference, the Audit staff explained the misstatements and subsequently 

provided BFC's representative with schedules detailing these discrepancies. The 

representative stated that BFC would amend its reports to correct the misstatements. 

3 Unitemized amount over reported. 
6 

Interim Audit Report Recommendation and Committee Response 

The Audit staff recommended that BFC: 

•	 Amend its reports to correct the misstatements; and 

•	 Amend the cash balance of its most recent report with an explanation that it resulted 

from audit adjustments from a prior period. It was further recommended that BFC 

reconcile its reported figures to bank records for subsequent periods in order to 

assure the current reported cash is correct. 

In response, BFC materially corrected the misstatements.