FEDERAL ELECTION COMMISSION 

WASHINGTON, D.C. 20463 

September 25,2015 

MEMORANDUM 

To: The Commission 

Through: ^ec Palmer 

Staff Director 

From: Patricia C. Orrock 

Chief Compliance Officer 

PCo 

r 

/^rThomas E. Hintermister^WJgO^^ 

Assistant Staff Director 

Audit Division 

Martin L. Favin 

Audit Manager 

By-" Sheraline Thomas 

. Lead Auditor 

Subject: Audit Division Reconunendation Memorandum on Jill Stein for President 

(JSFP) 

Pursuant to Commission Directive No. 70 (FEC Directive on Processing Audit Reports), 

the Audit staff presents its reconunendations below and discusses the findings in the 

attached Draft Final Audit Report (DFAR). The Office of General Counsel has reviewed 

this memorandum and concurs with the recommendations. 

Finding 1. Net Outstanding Campaign Obligations 

The Audit staffs review of JSFP's financial activity through August 31,2014, and 

estimated winding down costs indicated that the Candidate did not receive 

matching fund payments in excess of her entitlement. In response to the 

Preliminary Audit Report (PAR) and the DFAR, JSFP provided no further 

comments. 

The Audit staff recommends that the Commission find that the Candidate did not 

receive matching funds in excess of her entitlement. 

Finding 2. Misstatement of Financial Activity 

The Audit staff determined that in its 2012 disclosure reports, JSFP understated its 

reported receipts and ending cash-on-hand by $211,949, and $106,128, 

respectively; and oversmted disbursements by $13,850. JSFP filed amended 
reports subsequent to audit fieldwork to materially correct the misstatements. In 

response to the PAR, JSFP stated that the misstatements were a result of 

complications caused by its initial bookkeeper. JSFP had no additional comments 

in response to the DFAR. 

The Audit staff recommends that the Commission find that JSFP misstated its 

financial activity for calendar year 2012. 

Finding 3. Disclosure of Debts and Obligations 

The Audit staff identified debts totaling $78,043 not disclosed on Schedule D-P 

(Debts and Obligations) as required. JSFP filed amended reports subsequent to the 

audit notification letter and again subsequent to audit fieldwork to materially 

disclose these debts and obligations. In response to the PAR, JSFP stated that, 

during the course of audit fieldwork, it was able to identify various debts and 

obligations that were previously unreported due to mistakes made by the initial 

bookkeeper. JSFP provided no further comments in response to the DFAR. 

The Audit staff recommends that the Commission find that JSFP did not disclose 

debts and obligations totaling $78,043. 

Finding 4. Reporting of Receipts 

The Audit staff identified contributions firom individuals totaling $23,071 that 

JSFP did not itemize as required, and receipts totaling $57,622 that were not 

adequately disclosed. The disclosure errors were mostly incorrect election cycleto-date totals. JSFP filed amended reports subsequent to the audit notification 

letter materially correcting these itemization and disclosure errors. In response to 

the PAR, JSFP stated that it had discovered issues in its donor aggregation system 

which resulted in these errors and that these issues were corrected. JSFP provided 

no further coimnents in response to the DFAR. 

The Audit staff recommends that the Coimnission find that JSFP did not itemize 

contributions from individuals totaling $23,071, and did not adequately disclose 

receipts totaling $57,622. 

Findings. Reporting of Expenditures 

The Audit staff identified expenditures totaling $49,797 that JSFP did not itemize 

as required, and expenditures totaling $314,673 that were not adequately disclosed. 

The disclosure errors were mostly a result of the purpose not being disclosed or 

being inadequate. JSFP filed amended reports subsequent to the audit notification 

letter materially .correcting these itemization and disclosure errors. In response to 

the PAR, JSFP stated that after receiving clarificatipn fiom the Audit Division and 

Reports Analysis Division staff, it was able to identify and correct these errors. 

JSFP provided no further comments in response to the DFAR. 

The Audit staff recommends that the Commission find that JSFP did not itemize 

expenditures totaling $49,797, and did not adequately disclose expenditures 

totaling $314,673. 
Finding 6. Itemization of Candidate Loans 

The Audit staff identified loans from the Candidate totaling $40,000 that had not 

been reported correctly by JSFP. Amended reports filed subsequent to the audit 

notification letter materially corrected the reporting of these loans. In response to 

the PAR, JSFP indicated that all issues with the itemization of candidate loans had 

been corrected. JSFP provided no further comments in response to the DFAR. 

The Audit staff recommends that the Commission find that JSFP did not correctly 

report loans from the Candidate totaling $40,000. 

JSFP did not request an audit hearing. i 

If this memorandum is approved, a Proposed Final Audit Report will be prepared within 

30 days of the Commission's vote. 

In case of an objection, Directive No. 70 states that the Audit Division Recommendation 

Memorandum will be placed on the next regularly scheduled open session agenda. 

Documents related to this audit report can be viewed in the Voting Ballot Matters folder. 

Should you' have any questions, please contact Sheraline Thomas or Marty Favin at 694-

1200. 

Attachment: 

- Draft Final Audit Report of the Audit Division on Jill Stein for President 

cc: Office of General Counsel 
Draft Final Audit Report 

of the Audit Division on 

Jill Stein for President 

(October 11, 2011 - August 31, 2014) 

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 ^ 

the imitations, 

prohibitions, ' 

disclosure^ 

the elecj^Iaw. 

FuU 

The( 

initiate an ( 

action, at a latei 

respect to any o 

matters discussed in 

report. 

About the Campaign (p. 2) 

Jill Stein for President (JSFP) is the 

Jill Stein, a candidate for the G 

President of the United States 

Lexington, Massachusetts. F< 

Campaign Organization, 

Financial Activ i 

• Receipts ^ 

o Contributir 

o Matching Funds 

o I^ras Received 

o O 

o O 

Total 

committee for 

nomination for the ofTice of 

is headquartered in 

, see the chart on the 

if S 

IS from Pol! 

Disbu 

iditurdS 

lisbursements 

Recommendations (p. S) 

; Campaign Obligations (Finding 1) 

t of Financial Activity (Finding 2) 

Disclosure of Debts and Obligations (Finding 3) 

Reporting of Receipts (Finding 4) 

Reporting of Expenditures (Finding S) 

Itemization of Candidate Loans (Finding 6) 

815,851 

372,130 

64,000' 

4,235 

3,368 

$ 1,259,584 

$ 1,070,033 

26,803 

20,000 

1,170 

S 1,118,006 

26U.S.C. §9038(a). 

These figures contain both primary and general activity. The general activity accounts for approximately 

8567,994, or 45% of total receipts, and $269,888, or 24% of total disbursements. See Committee 

ShustiBsonp. 1. 

The Candidate made loans as follows: $44,000 for primary election activity and $20,000 for general 

election activity. Therefore, the Candidate did not exceed the $50,000 limitation on expenditures for the 

primary election from the Candidate's funds.. 26 U.S.C. §9035(a); 1 i CFR §9035.2. 
Draft Final Audit Report 

of the Audit Division on 

Jill Stein for President 

(October 11, 2011 - August 31, 2014) 

^ , 

4r 
Table of Contents 

Part in. Summaries ^ 

Findings and Recommendations ^ ' 4 

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Inventory of Campaign Records 1 

Committee Structure 1 

i 

Part II. Overview of Campaign ^ " 

Campaign Organization 3 

Overview of Financial Activity ^ 4 

Part IV. Findings and Recommend.n :s-ns 

Finding 1. Net Outstanding Cammgn Obligation 7 

Finding 2. Misstatement of Finam cy 10 

Findings. Disclosure of Debts an< ^ \lL 

Finding 4. Reporting of Receipts \ ^ 14 

Findings. Reporting ^.Expenditures % J/ 16 

Finding 6. ididatcLo^^ 18 
Parti 

Background 

Authority for Audit 

This report is based on an audit of Jill Stein lor President (JSFP), undertaken by the Audit 

Division of the Federal Election Conunission (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 ai 

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

States Code and Section 9038.1(a)(2) of the Commission' 

Conunission may conduct other examinations and audii 

necessary. 

Scope of Audit 

This audit examined: ^ 

1. the campaign's compliance with limitations i 

the campaign's compliance with the limitations 

ittees who 

i) of the United 

nns state that the 

I time as it deems 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

the campaign's compliance with 

the disclosure of contributions and 

the disclosure of disbursements, del 

the consistency between reported fi 

the accuracy of the of Net 

the campaign's i spendinj 

9. the completen^ ^orci ^ d 

10. other campaign _ i ' s 

ihibition on i 

ed; 

mtions; 

and loansj^ 

date contributions and loans; 

iting prohibited contributions; 

f 

, ugn Obligations; 

ry to the psTew. 

Invei^ > ' 'in'i 

The Ajalit strdf roul ^nd 

au work. JSFP'^ Is^ 

Re* i.s 

ventory of campaign records before it begins 

laterially complete and fieldwork conunenced 

Committi i nic* ii 'c 

JSFP was the onl ^ committee authorized by Jill Stein (the Candidate) for the 

2012 Presidential eli i and conducted both primary and general election activity for 

the Candidate. JSFI^pened four bank accounts: three primary accounts and a general 

account. In practice, JSFP deposited nearly all contributions received before the 

Candidate's nomination into the primary accounts, and most contributions received after 

the nomination into the primary accounts, unless otherwise designated and deposited into 

the general account. JSFP received matching funds for its primary campaign and this 
audit covered the JSFP's primary election activity to determine if expenses were qualified 

campaign expenses defrayed in connection with the primary election/ 

* Under Title 26, this audit includes an examination of JSFP's Statement of Net Outstanding Campaign 

Obligations (Finding 1) based solely on JSFP's primaiy election activity for the purpose of determining 

the extent to which the Candidate is entitled to primary matching funds. This audit also covers an 

examination of JSFP's reporting under Title S2 which includes general election activity. For 

clarification, the Audit staff has indicated in Finding 2 - Misstatement of Financial Activity and Finding 

6 - Itemization of Candidate Loans those transactions related to general election activity. 
Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Date of Registration November 14,201^^^ 

• Eligibility Period® Au^t 22.20^^ep&mber 6,2012 

• Audit Coverage October 1 l^^^^ugdst 31,2014 

Headquarters Lexingtof^Mass^ s 

Bank Information 

• Bank Depositories im V ^ 

• Bank Accounts TES^ iimccountsai _ t general account 

Treasurer 

• Treasurer When Audit Was Conductad.. James 

Treasurer During Period Covered by t mes Moiil^^jber 23,2012 - Present 

jidrev^s^^ 6,2012 - October 22,2012 

' J^vember 14,2011 - July 5,2012 

Management Information TM 

• Attended Conunissii inance %No ^ 

Seminar 

Who Handled Accoi 

Recordkeepine Tasks 

[Staff 

On July 9,2012, the Candidate submitted a signed letter to the Commission, which was amended on July 12, 

2012, seeking to become eligible to receive Presidential primary matching funds and agreeing that she and her 

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

was submitted on July 16,2012, and the Commission certified the Candidate as eligible to receive matching funds 

on August 22,2012. The period during which the Candidate was eligible for matching fiinds ended on September 

6,2012, die date of ineiigibility. 

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

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

(Audited Amounts)^ 

Cash-on-hand @ October 11,2011 SO 

Receipts 

o Contributions from Individuals" 815,851 

o Matching Funds Received^ ^72.130 

o Loans Received from the Candidate .#(^,000'" 

o Contributions from Political Parties 4,235 

o Offsets to Operating Expenditures .3.368 

Total Receipts si;a|h584 

Disbursements 

o Operatine Expenditures jt 

o runaraismg uisoursemenis 

i. V 1, 

o Loan Repayments 20,000 

o Contribution Refunds 

Totai Disbursements 

1,170 

118,006 

Cash-on-hand @ December 31,2012 \ jT $141,578 

TM » 

A V 

^ ^ 

V 

'' p 

V 

These figures contain both primary and general activity. See Committee Structure on p. 1. 

' JSFP received approximately 8,400 contributions from approximately 6,000 individuals. 

' As of the Candidate's date of ineligibility, September 6,2012, JSFP had received matching funds totaling 

$100,000. JSFP received an additional $272,130 by December 3,2012, for a total of $372,130. 

See Footnote 3. 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Net Outstanding Campaign Obligations 

The Audit staffs review of JSFP's financial activity through August 31,2014, and 

estimated winding down costs indicated that the Candidate did ij^^eive matching fund 

payments in excess of her entitlement. 

In its response to the Preliminary Audit Report 

further comment. (For more detail, see p. 7.) 

Finding 2. Misstatement of 

During audit fieldwork, a comparison of JS! 

records revealed that, for 2012, JSFP understated ii 

on-hand by $211,949, and $106,128,^spectively; an 

$13,850. Amendments filed subseqw ' le audit i 

correct the identified misstatements. 1 ^ •? filed 

audit fieldwork to materially correct the 

complications caus 

duplicated various 

to identify shortcomini 

assistance« 

I its 

rovided no 

tivity f 

activit} 'its bank 

ipts and ending cashtated disbursements by 

stter did not materially 

sfi reports subsequent to 

lit Repor^Sbmmenqpon, JSFP stated that, due to 

ookkeep^ initial filings lacked certain records and 

irther, JSFP ted that, during fieldwork, it was able 

nding made necessary corrections with the 

; the~m^^tements. (For more detail, see p. 10.) 

Fii^:i'^'^ Disi •iirc'^^Debts and Obligations 

During ai Iwork, th dit ^ff identified debts totaling $78,043 not disclosed on 

Schedule ,^btsand- Rations) as required. Amendments filed subsequent to the 

audit notificati^r di: xi some of these debts. JSFP filed amended reports to 

materially disclo: ^bts and obligations. 

In response to the PrCliminary Audit Report recommendation, a JSFP representative 

stated that, during the course of audit fieldwork JSFP was able to identify various debts 

and obligations that were previously unreported due to mistakes made by the initial 

bookkeeper. JSFP filed amended reports subsequent to audit fieldwork which materially 

corrected the disclosure of these debts and obligations. (For more detail, see p. 12.) 

Finding 4. Reporting of Receipts 

During audit fieldwork, the Audit staffs review identified contributions from individuals 

totaling $23,071 that JSFP failed to itemize. In addition, receipts totaling $57,622 were not 
adequately disclosed. For most of these contributions, the election cycle-to-date total 

disclosed on Schedules A-P (Itemized Receipts) was incorrect. Amended reports filed 

subsequent to the audit notification letter materially corrected both the itemization and 

disclosure errors. 

In response to the Preliminary Audit Report recommendation, JSFP stated it discovered 

"unspecified" issues with import functions where donor information would not be 

recognized as a potential duplicate, causing various donor aggregates to be inaccurate in 

final reports. These issues have been corrected with the amended reports previously 

filed. ^ormored(^l,seep. 14.) ^ 

V 

Finding 5. Reporting of Expenditures 

During audit fieldwork, the Audit staff identified expen< ^ng $49,797 that JSFP 

failed to itemize as required. In addition, expenditure^ og $3^ . were not 

adequately disclosed. For most of these expenditim^t^ptupose \ iisclosed or 

was inadequately disclosed. Amended reports fij^aubsequent to the. ification 

letter materially corrected both the itemizatiq^^ ulos%c errors. ^ 

r 

In response to the Preliminary Audit Report recomi on, JSFP indicated that, after 

receiving clarification from the Audit sion and Jialysis Division staff, it was 

able to identify all expenditures lackii ^r itemizatii i^quate descriptions. 

JSFP filed amended reports which corrd^^^ "ors. (I WK detail, see p. 16.) 

Finding 6. Iten 

The Audit staff ii 

reported correctly 

letter materially 

In respoi 

date, al 

ns 

Lte tota^g $40,000 that had not been 

led subsequent to the audit notification 

ommendation, JSFP indicated that, to 

'candidate loans have been corrected. (For more 
Part IV 

Findings and Recommendations 

Finding 1. Net Outstanding Campaign ObHgations 

Summary 

The Audit staffs review of JSFP's financial activity through August 31,2014, and 

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

payments in excess of her entitlement ^ 

In its response to the Preliminary Audit Report recommend 

fiirther comment. 

FP provided no 

Legal Standard 

A. Net Outstanding Campaign Obligation 

candidate's date of ineligibility (see definitiol 

statement of "net outstanding campaign 

among other, things: 

• The total of all committee i 

coimnittee and capital assets 11 

• The total of all outstanding obligl^i 

• An estimate of necessary winding^ 

MHIO). 

3 the. 

[ithin 15 day 

lidate must 

lent must 

ng cash-i , amounts owed to the 

~ T mark 

id c|^aign expenses; and 

m. §9034.5(a). 

B. Dateoflneligil 

occurs first: ^ 

• The day on wh 

• The ISH^ay folk 

of ineligi whichever of the following dates 

10 

ofth 

ininates 

se of a I 

lar. 

active in more than one state; 

ixiutive primary in which the candidate 

: of the popular vote; 

ji| nt period, which is generally the day when the 

ndidi r the general election; or 

^te i^ose party does not make its selection at a national 

of the last national convention held by a major party in 

CFR §§9032.6 and 9033.5. 

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

campaign expense. ^ 

• An expense that is: 

o Incurred 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 through 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 federd law or the law of the state 

where the expense was incurred or paid. 11 CFR §9032.9. 
• An expense incuited 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 terminating 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 oivthe day when the 

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

E. Winding Down Costs. A primary election candidate 

election may receive and use matching funds after noti 

of the candidate's withdrawal from the campaign f( 

ot run in the general 

piission in writing 

; date of the 

party's nominating convention, if the candidate 

A primary election candidate who runs in the 

aftn the general election before using any 

regardless of whether the candidate receives 

11 CFR §9034.11(d). 

Facts and Analysis 

A. Facts 

The Candidate's date 

reviewed JSFP's fins^ial 

down costs and pn 

appears on 

le convention, 

days 

election. 

SeptemflP d, 2012. The Audit staff 

31,2014, analyzed estimated winding 

atanding Campaign Obligations that 
Jill Stein for President 

Statement of Net Outstanding Campaign Obligations 

As of September 6,2012 

Prepared August 31,2014[a] 

Assets 

Cash in Bank $ 57,302 

Accounts Receivable 31.443 

Total Assets $ 88,745 

Liabilities 

Accounts Payable for Qualified Campaign Expenses at 9/6/1 $ 307,500 

Loans Payable to Candidate ^ 100[b]" 

Winding Down Costs; " 

Actual Winding Down Costs Paid (12/7/12 - 8/^ . >• 

Estimated Winding Down Costs (9/1/14 - 3/3],^ 55_ 

Total Liabilities , V ' i40 

Net Outstanding Campaign Obligations (Deficit) as"^ rniber 6,2012 $f421.89Sl 

[c] 

compared 

[a] The latest report filed by JSFP covered ac 

[b] Loans payable at DOI. 

[c] The General election was November 6.2012. 

. General election on Deci 12. 

[d] Estimated winding > 

accordingly. 

Shown below are adju 

6.2012 til • -

payment 

1st 31. 

begins 31 days after the 

windl^ down costs and adjusted 

er the Candidate's DOI on September 

received its last matching fund 

nding Ct 01 ns (Deficit) as of 

Septei ^2012 ^ 

($421,895) 

Less: Co^^^ons Reeved (September 7,2012 through 

December 3^!^^ M 

98,753 

Less: Matching deceived September 7,2012 through 

December 3,201^ 

272,130 

Remaining Net Outstanding Campaign Obligations 

(Deficit) as of December 3,2012 

$ (51,012) 

As presented above, JSFP has not received matching fund payments in excess of the 

amount to which the Candidate was entitled. 

" This total represents all loans payable at DOI. Loan repayments of $20,000 each were paid to the 

Candidate on September 11,2012, and March 20.2013, totaling $40,000. The outstanding balance due 

on the loan is $4,000. 
10 

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

JSFP representatives at the exit conference. After the exit conference, the representatives 

provided additional documentation as requested to update the NOCO statement. 

B. Preliminary Audit Report Recommendation 

The Preliminary Audit Report recommended that JSFP demonstrate any adjustments it 

believed were required in connection with any part of the NOCO statement or provide 

any other additional corrunents. 

C. Committee Response to Preliminary Audit Report 

In its response to the Preliminary Audit Report recommendation 

further conunent. 

[provided no 

Finding 2. Misstatement of Fina i\ 

Summary ^ V ^ 

During audit fieldwork, a comparison of JSFP's i ii uial activity its bank 

records revealed that, for 2012, JSFP understated its 71 d receipts and ending cashon-hand by $211,949, and $106,128,^^^ctively; and gjated disbursements by 

$13,850. Amendments filed subsequ^l' notifi^ :er did not materially 

correct the identified misstatements. „ reports subsequent to 

audit fieldwork to materially correct the ri 

In response to the lit Report"^ 

complications causef^^ its ii bool 

duplicated various^pT resss?Furtfaer, JSl 

to identify shortcoming 

assistancejg^l^ a no 

audit vorkti he misstatements. 

ommen^tion, JSFP stated that, due to 

litial filings lacked certain records and 

1 that, during fieldwork, it was able 

nade necessary corrections with the 

filed amended reports subsequent to 

r 

Legal M i^rd 

Contents of 3. Eac port must disclose: 

• the amo Icast^n-hand at the begirming and end of the reporting period; 

• the total arn^^^ receipts for the reporting period and for the election cycle; 

• the total amo&t of disbursements for the reporting period and for the election 

cycle; and 

• certain transactions that require itemization on Schedule A-P (Itemized Receipts) or 

Schedule B-P (Itemized Disbursements). 52 U.S.C. § 30104 ^)(1), (2), 3), (4) and 

(5). 
11 

Facts and Analysis 

A. Facts 

The Audit staff leconciled JSFP's reported financial activity with its bank records and 

determined that there was a misstatement of beginning and ending cash-on-hand, receipts 

and disbursements. The following chart outlines the discrepancies and succeeding 

paragraphs explain, to the extent possible, the reasons for the misstatements. 

2012 Activity" 

Reported Bank Rei»rds Discrepancy 

Beginning Cash-on-hand 

Balance ^ January 1.2012 

$19,000 $328 

Understated 

Receipts $1,018,273 4 1 $211,949" 

Understated 

Disbursements $1,121,82^ K^$l.ll $13,850'" 

Overstated 

Ending Cash-on-hand Balance 

@ December 31,2012 

$35^^ir^ $141,578 128'" 

J^derstated 

The beginning cash-on-hand was overstated by $328 

discrepancies. 

The understatement of receipts resulted 

• Matching Funds not reported 

• Contributions uals not 

• In-kind con^mmi ported 

• Loans fronnli did) lot 

• Offsets not rej 

• Re " ( 

: to prior period 

ing: 

identified < 

iderstatei 

not reported 

xi by a deposit/credit 

f ^ ipts 

S 100,000 

89,647 

2,539 

40,000 " 

1,509 

4,235 

(23,772) 

(2.2091 

%2iLm 

The overstatemei 

Inter-accouni isfers reported as disbursements S (17,000) 

This activity represents both general and primary election activity. See Footnote 6. 

" General election activity represents $86,083, or 41% of the understated receipts totals. 

General election activi^ represents ($7,803), or S6% of the overstated disbursements totals. 

" JSFP's reported ending cash-on-hand balance does not calculate correctly due to a fiulure to cany 

forward the ending cash-on-hand balance of ($75,680) from its 2012 September Monthly report as the 

beginning cash-on-hand on its 2012 October Monthly report. Absent this error, the correct ending cash 

balance as of December 31,2012 should have been ^84,549). 

'* See Footnote 10. 

The unreported loans from the Candidate, totaling $40,000, were comprised of $20,000 loaned for the 

primary election and $20,000 loaned for the general election (see Finding 6). 
12 

Reported voided checks 

Over-reported payroll disbursements 

Double reporting of Candidate loan repayment 

Disbursements reported not supported by a check/debit 

Operating expenditures reported twice 

Bank reversing entries reported as disbursements 

Operating expenditures not reported 

In-kinds not reported 

Refund not reported and other reporting errors 

Unidentified Difference 

Net Overstatement of Disbursements ^ 

The understatement of ending cash-on-hand in the 

misstatements described above. 

(3.765) 

(2,585) 

(20,000) 

(9,399) 

(23,108) 

(285) 

61,082 

2,539 

825 

(2,154) 

($ 

resulted from the 

B. Preliminary Audit Report Recommendr 

At the exit cotiference held at the end of audi 

misstatements and subsequently provided JSFP re 

these discrepancies. In response, the representatives 

The representatives offered no additiS^ramments. A 

the audit notification letter had not «ted 

However, additional fended reports fil^ o the 

corrected these misstatements. 

.udit staff exp^^d the 

ith schedu^ detailing 

amend JSFP's reports, 

rents filed subsequent to 

tified misstatements, 

conference materially 

The Preliminary Au^^ trrunendei iit JSFP ^vide any additional 

information or wrj^^T inei hat it consi^sd^relevant to this matter. 

C. Comm' n> 

comp j^^ns causi 

arious ( 

to ident mrtcomings if 

assistance Vudit sta 

audit fieldwo ateria 

- 1 It Report 

ommendation, JSFP stated that, due to 

r, initial filings lacked certain records and 

, JSFP stated that, during fieldwork, it was able 

i to4liis finding and made necessary corrections with the 

-s noted above, JSFP filed amended reports subsequent to 

3rrect the misstatements. 

Finding 3. Dfe^closure of Debts and Obligations 

Summary 

During audit fieldwork, the Audit staff identified debts totaling S78,043 not disclosed-on 

Schedule D-P (Debts and Obligations), as required. Amendments filed subsequent to the 

audit notification letter disclosed some of these debts. JSFP filed amended reports to 

materially disclose these debts and obligations. 
13 

In response to the Preliminary Audit Report recommendation, a JSFP representative 

stated that, during the course of audit fieldwork, JSFP was able to identify various debts 

and obligations that were previously unreported due to mistakes made by the initial 

bookkeeper. JSFP filed amended reports subsequent to audit fieldwork which materially 

conected the disclosure of these debts and obligations. 

Legal Standard 

A. Continuous Reporting Required. An authorized committee must disclose the 

amount and nature of outstanding debts and obligations until those debts are 

extinguished. 52 U.S.C. §3ffl04(b)(8) and 11 CFR §§104.3(d) a " D4.11(a). 

B. Separate Schedules. An authorized committee must fil rate schedules for debts 

owed by and to the committee with a statement explaini^' umstances and 

conditions under which each debt and obligation was of^ ashed. 

11 CFR §104.11(a). 

C. Itemizing Debts and Obligations. ^ V 

• Once it has been outstanding 60 days frori^^ datejp^ped, a debt JI^SOO or 

less must be reported on the next regularly s d report. 

• A debt exceeding $500 must. 1 closed in the^^to ^t covers the date on 

which the debt was incurred, i xurring ive expenses (such as 

rent) shall not be reported as t oaymt date. 

11 CFR §104.11(b). \ 

Facts and Anal' 

A. Facts 

During audit fieldworl 

servici 

tele 

del 

as 

ar 

he. 

vertising 

I ven< 

mi 

lioi 

ta 

Die disbursement records to reconcile 

/endors provided JSFP mainly with 

as ballot access petitioning, legal services, printing, 

convention services. The Audit staff identified 

178,043'* that were not disclosed on Schedule D-P, 

B. Preliminar,- « t l^^ort Recommendation 

The Audit staff matter to JSFP representatives at the exit conference and 

provided schedules ^uuiUig the unreported deto for each reporting period. The 

representatives agreed to file amendments, but offered no additional comments during the 

exit conference. The Audit staff reviewed amended reports filed after the audit 

notification letter and concluded that debts totaling $4,501 have not yet been disclosed. 

The Preliminary Audit Report recommended that JSFP provide documentation 

demonstrating that the remaining $4,501 in expenditures did not require reporting on 

" Each debt amount was counted once, even if it required disclosure over multiple reporting periods. 
14 

Schedule D-P. Absent such documentation, it was further recommended that JSFP 

amend its reports to disclose the remaining outstanding debts. 

C. Committee Response to Preliminary Audit Report 

In response to the Preliminary Audit Report recommendation, a JSFP representative 

stated that, during the course of audit fieldwork, JSFP was able to identify various debts 

and obligations that were previously umeported due to mistakes made by the initial 

bookkeeper. JSFP filed amended reports subsequent to audit fieldwork which materially 

corrected the disclosure of these debts and obligations. 

Finding 4. Reporting of Receipts 

Summary 

During audit fieldwork, the Audit staffs review i^ :ontribu1 

totaling $23,071 that JSFP failed to itemize. 1 ution, ^ipts total) 

^equately disclosed. For most of these conti' . the^ction cycle-1 

disclosed on Schedules A-P (Itemized Receipts) ^ 

m individuals 

2 were not 

^otal 

filed 

subsequent to the audit notification letter materially i 

disclosure prrors. 

ed both the itemization and 

In response to the Preliminary Audit R 

"unspecified" issues with import fimctio: 

recognized as a potentii ite, causi: 

final reports. These sen 

filed. ^ 

Legal Standard 

A. Itemi 

gn cycle, e 

ibutor. 52'^ 

idatioiv stated it discovered 

ion would not be 

_p:egates to be inaccurate in 

with the^ended reports previously 

from Individuals, An authorized 

ibution from an individual if it exceeds $200 per 

combined with other contributions from the 

»)(3)(A). '>• 

B. Election'l' Thei on cycle begins on the first day following the date of the 

previous gi ecti nd ends on the date of the next general election. If 

contributions i Inditures are designated for another election cycle, then the 

election cycle bej^s when the first contribution is received or expenditure is made. 

11 CFR§ 100.3(b). 

C. Required Information for Contributions from Individuals. For each itemized 

contribution from an individual, the committee must provide the following 

information: 

• The contributor's full name and mailing address; 

• The contributor's occupation and the name of his or her employer; 

• The date of receipt (the date the committee received the contribution); 

• The amount of the contribution; and 
15 

• The election cycle-to-date total of all contributions from the same individual. 11 

CFR §§100.12 and 104.3(a)(4) and 52 U.S.C§30104(b)(3)(A). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staff reviewed all contributions from individuals whose 

contributions aggregated in excess of $200. These reviews identified the following; 

1. Contributions Not Itemized - There were 268 contritions from individuals 

totaling $23,071 that JSFP failed to itemize on (Itemized 

Receipts), as required. 

2. Contributions Not Adeouatelv Disclose^ ^ere ^0 contributions 

from individuals totaling $57,622, for ^^^tj^^iectioi^ to-date 

amounts and/or contributor names ^ther incorrectly 1 or 

missing. ^ V 

These itemization and disclosure errors resulted maii^^m: 

• Multiple contributor identificq^pn numbers w^^^ted in JSFP's database for 

the same individual mainly ie» i incotrec^Ma entry of contributor 

information. For example, the name^^roen entered incorrectly 

for contributions that were appar^y e iimividual; 

• The Audit sta^l ation of t^^ceipts ds^base provided by JSFP resulted 

in the detem^^on 1 rproximate^ ,780^ receipts had been omitted fix)m 

the databa^^^^ n mtatives cou^^t explain why these receipts had been 

omitted. Altho^^ ' litems did not require itemization, the 

r _ _ jregate election-to-date amounts on 

ibutions fixrm the same individuals to be incorrect; 

B. Fi ryAu< : R^mmendation 

At the ex aftrence heli e end of audit fieldwork, the Audit staff explained the 

errors and sii^^pitly pn ed JSFP representatives with schedules detailing these 

discrepancies, ^^tppons^^e representatives agreed to amend JSFP's reports. The 

representatives of^ • additional comments during the exit conference. 

Subsequent to the exit conference, the Audit staff reviewed amended reports filed after 

the audit notification letter and concluded that the amendments materially corrected both 

the itemization and disclosure errors noted above. 

" Of thjs amount, S6,272 is included in Finding 2, Misstatement of Financial Activity, as part of the 

receipts adjustment of S89,647 for contributions from individuals not reported. 

These items are included in the adjustments for receipts presented at Finding 2, Misstatement of 

Fingncial Activity. 
16 

The Preliminary Audit Report recommended that JSF? provide any additional 

information or written comments that it considered relevant to this matter. 

C. Committee Response to Preliminary Audit Report 

In response to the Preliminary Audit Rq)ort recommendation, JSFP stated it discovered 

"unspecified" issues with its FECFile import functions where donor information was not 

recognized as a potential duplicate, causing various donor aggregates to be inaccurately 

reported. JSFP filed amended reports which corrected these errors. 

Finding 5. Reporting of Expenditures 

Summary 

During audit fieldwork, the Audit staff identified.ex^m ^ for^ imary election 

totaling $49,797 that JSFP failed to itemize as reqjjj^r^ addition lepditures for the 

primary election totaling $314,673 were not a> ely disclosed. FormT 

expenditures, the purpose was not disclosed o nadeq^ely disclosei Knded 

reports filed subsequent to the audit notification let|f ^SSeg corrected WHi the 

itemization and disclosure errors. 

In response to the Preliminary Audit 1 

receiving clarification from the Audit 

able to identify all expenditures lacking 

JSFP filed amended rep correct 

Legal Standard 

A. Reporting Oj^ f 

person exce^ $200 

mment' I? indicated that, after 

^rtSi' lis Division staff, it was 

;^a(dequate descriptions. 

ei 

expenditures to the same 

'committee must report the: 

when ...A« ^ere made; 

: (a brief ( 

I4(b)(5)( 

iptiofl^f why the disbursement was made—see below). 

52U.S1 andllCFR§104.3(b)(4)(i). 

B. Examples 0 

• Adequate D^^tions. Examples of adequate descriptions of "purpose" include 

the followingT dinner expenses, media, salary, polling, travel, party fees, phoiie 

banks, travel expenses, travel expense reimbursement, catering costs, loan 

repayment, or contribution refund. 11 CFR §104.3(b)(4)(i)(A). 

• Inadi^uate Descriptions. The following descriptions do not meet the requirement 

for reporting "piirpose": advance, election day expenses, other expenses, expense 

reimbursement, miscellaneous, outside services, get-out-the-vote, and voter 

registration. 11 CFR §104.3(b)(4)(i)(A). 

C. Election Cycle. The election cycle begins on the first day following the date of the 

previous general election and ends on the date of the next general election. If 
17 

contributions and expenditures are designated for another election cycle, then the 

election cycle begins when the first contribution is received or expenditure is made. 

HCFR§ 100.3(b). 

Facts and Analysis 

A. Facts 

During audit fieldwork, the Audit staffs review of all itemizable operating expenditures 

for Ae primary election identified the following. 

1. Operating Expenditures Not Itemized - There wer^ penditures totaling 

J49 79721 jgpp ^ itemize on Schedu 

Disbursements). 

Operating Expenditures Not Adeai 

disclose 166 expenditures totaling $3^ 

of the disclosure errors were 

inadequate purposes, such as "coiTsul! 

fees", for operating expenditures. Othe 

payroll expenditures, aloi^^th the failure 

to expenditures for reimbiu 1 to individi 

(Itemized 

[ - J -t adequately 

§73 oil Schedule : majority 

3t discing a purpo- ^^closing 

10:^1^ labor" and^^fessional 

eluded incorrectly reporting 

B. Preliminary Audit Report -

At the exit conference held.at the end of i 

expenditure reporting ibsequen! 

schedules detailing^|e xies. In i 

amend its reports.^T^ esei ives of 

conference. 

memo entries relating 

^Audit staff explained the 

[prov 'P representatives with 

mse, the JSF? representatives agreed to 

iitional comments during the exit 

Sub£ 

the a 

thef 

itificatiori 

1 and disi 

The Prelim 

information oi 

lerrc 

le Audit staff reviewed amended reports filed after 

(id that the amendments materially corrected both 

ted above. 

recoimnended that JSF? provide any additional 

lents that it considered relevant to this matter. 

C. Committee Resi le to Preliminary Audit Report 

In response to the Preliminary Audit Report recommendation, JSF? indicated that, after 

receiving clarification from the Audit st^, it was able to identify and correct all 

expenditures lacking proper itemization or inadequate descriptions with the amended 

reports previously fil^. 

Of this amount, S45,200 is inciuded in Finding 2,1 

adjustments for disbursements not reported. 
18 

I Finding 6. Itemization of Candidate Loans 

Summary 

The Audit staff identified loans fiom the Candidate totaling $40,000 that had not been 

reported correctly by JSFP. Amended reports filed subsequent to the audit notification 

letter materially corrected the reporting of these loans. 

In response to the Preliminary Audit Report recommendation, JSFP indicated that all 

issues with the itemization of these Candidate, loans have been ( 

Legal Standard 

A. Reporting Loans. All loans received by a commil 

A-P (Itemi^ Receipts) and continuously 

made on a loan must also be itemized. 11 

§104.11. 

B. Schedule C-P. Both the original loan and pi, 

reported each reporting period until the loan is 

following: ^ 

• The source of the loan; and 

• The type of loan the candidate 

card, or home equity line of credi^ 

guarantorswitl forloanmo^ r in 

candidate's §104.3(( 

fl mized on Schedule 

repa payments 

'a)(4)(iv (iii) and 

C. Schedule C-1. 

brokerai it, < 

usei^ 

c littee mu 

P '.thefollo\ 

• ; date, amo 

• leand 

• Th 5 and 

loan, ist 

Facts and Analylte 

ai 

pnncip 

le committee must report the 

ik loai kerage account, credit 

•dx for endorsers and 

for "Loan Source" after the 

jbtainsa from an advance on the candidate's 

line of credit or other line of credit for 

iaate'S<eampaign, the candidate's principal campaign 

:, covering foe period when foe loan was 

>n Schedule C-1 or C-P-1: 

and ijlf^st rate of foe loan, advance, or line of credit; 

of foe lending institution; and 

of collateral or other sources of repayment that secure foe 

line of credit, if any. 11 CFR §104.3(d)(4). 

A. Facts 

The Audit staff identified loans from foe Candidate totaling $40,000 that were not 

itemized correctly by JSFP. On June 22,2012, JSFP received loans from foe Candidate 

for foe primary election in foe amounts of $14,000 and $6,000 that were disclosed 

correctly on Schedule C-P but not itemized on Schedule A-P. In addition, on September 

11,2012, foe Candidate made a loan for foe general election in foe amount of $20,000 

which was not itemized on either Schedules A-P or C-P. 
19 

It should be noted that the Audit staffs bank reconciliation for 2012 determined that the 

Candidate loans totaling $40,000 discussed here were also not included in reported 

activity totals on the Detailed Summary Page of their respective reports (see Finding 2). 

B. Preliminary Audit Report Recommendation 

At the exit conference, the Audit staff provided JSFP representatives with schedules 

detailing these discrepancies. In response, the representatives agreed to amend JSFP's 

reports. The representatives offered no addition^ comments during the exit conference. 

Subsequent to the exit conference, the Audit staff reviewed amen^ reports filed after 

the audit notification letter and concluded that the loans from ' '^ta^idate were 

properly itemized on these amendments. 

The Preliminary Audit Report recornmended that JSFP 

information or written comments that it considered 

C. Committee Response to Preliminary Ai 

In response to the Preliminary Audit Report i 

issues with the itemization of these Candidate 1 

V 

litional 

JSFP indica It all