Preliminary Audit Report 

of the Audit Division on 

O'Malley for President 

(May 15, 2015 - December 31, 2016) 

• The audit 

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, 

determines whether the 

candidate was entitled 

to all of the matching 

funds received, 

whether the campaign 

used the matching 

funds in accordance 

with the law, whether 

the candidate is entitled 

to additional matching 

funds, and whether the 

campaign otherwise 

complied with the 

limitations, 

prohibitions, and 

disclosure requirements 

of the election law. 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any of 

the matters discussed in 

this report. 

About the Campaign (p. 2) 

O'Malley for President is the principal campaign committee for 

Martin Joseph O'Malley, a candidate for the Democratic Party 

nomination for the office of President of the United States. The 

Committee is headquartered in Baltimore, Maryland. For more 

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

Financial Activity (p. 3) 

• Receipts 

o Contributions from Individuals 

o Matching Funds Received 

o Loans Received 

o Contributions from Other Political 

Committees 

o Offsets to Operating Expenditures 

Total Receipts 

• Disbursements 

o Operating Expenditures 

o Loan Repayments 

o Contribution Refunds 

o Other Disbursements 

Total Disbursements 

$ 4,574,259 

1,088,929 

500,000 

115,002 

82,577 

$ 6,360,767 

$ 5,707,052 

500,000 

78,127 

650 

$ 6,285,829 

Findings and Recommendations (p. 4) 

• Net Outstanding Campaign Obligations (Finding 1) 

• Payments of Non-Qualified Expenses (Finding 2) 

• Failure to Itemize Offsets to Expenditures (Finding 3) 

• Reporting of Debts and Obligations (Finding 4) 

• Stale-Dated Checks (Finding 5) 

26 U.S.C. §9038(a). 
Preliminary Audit Report 

of the Audit Division on 

O'Malley for President 

(May 15, 2015 - December 31, 2016) 
Table of Contents 

Page 

Fart I. Background 

Authority for Audit 1 

Scope of Audit 1 

Inventory of Campaign Records 1 

Part II. Overview of Campaign 

Campaign Organization 2 

Overview of Financial Activity 3 

Part III. Summaries 

Findings and Recommendations 4 

Summary of Amounts Owed to the U.S. Treasury 5 

Part IV. Findings and Recommendations 

Finding!. Net Outstanding Campaign Obligations 6 

Finding 2. Payments of Non-Qualified Expenses 9 

Finding 3. Failure to Itemize Offsets to Expenditures 11 

Finding 4. Reporting ofDebts and Obligations 12 

Findings. Stale-Dated Checks 13 
Parti 

Background 

Authority for Audit 

This report is based on an audit of O'Malley for President (OMFP), undertaken by the 

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

Section 9038(a) of Title 26 of the United States Code. That section states, "After each 

matching payment period, the Commission shall conduct a thorough examination and 

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

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

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

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

time to time as it deems necessary. 

Scope of Audit 

This audit examined original reports filed by OMFP prior to the audit notification letter 

dated November 30,2016.^ The audit also examined the original filings of the 2016 

December Monthly and Year-End Reports. The following areas were covered by this 

audit: 

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

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

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

4. the disclosure of contributions and loans received; 

5. the disclosure of disbursements, debts and obligations; 

6. the consistency between reported figures and bank records; 

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

8. the campaign's compliance with spending limits; 

9. the completeness of records; and 

10. other campaign operations necessary to the review. 

Inventory of Campaign Records 

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

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

immediately. 

^ Subsequent to the audit notification, OMFP filed amendments to these reports. These amendments were 

given a limited review to determine if issues noted in the Preliminaiy Audit Report were comcted by 

OMFP. 
Part II 

Overview of Campaign 

Campaign Organization 

Important Dates 

• Date of Registration May 29,2015 

• Eligibility Period^ November 19,2015 - February 1,2016 

• Audit Coverage^ May 15,2015 - December 31,2016 

Headquarters Baltimore, Maryland 

Bank Information 

• Bank Depositories One 

• Bank Accounts Four(l checking; 1 merchant processing; 1 conduit 

income; and 1 reserve) 

Treasurer 

• Treasurer When Audit Was Conducted Terry Lee Lierman 

• Treasurer During Period Covered by Audit Terry Lee Lierman 

Management Information 

• Attended Comnvission Campaign Finance 

Seminar 

No 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

^ On November S, 2015, the Candidate submitted a signed letter (dated November 2,2015), to the Commission 

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

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

submitted on November 4,2015, and the Commission certified the Candidate as eligible to receive matching 

funds on November 19,2015.- The period during which the Candidate was eligible for matching funds ended on 

February 1,2016, the Candidate's date of ineligibility. 

* The Audit staff conducted limited reviews of receipts and expenditures after December 31,2016, to determine 

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

(Audited Amounts) 

Cash-on-hand ® May 15,2015 $0 

Receipts 

o - Contributions from Individuals^ 4,574,259 

o Matching Funds Received^ 1,088,929 

o Loans Received 500,000 

o Contributions from Other Political 115,002 

Committees 

o OfTsets to Operating Expenditures 82,577 

Total Receipts 5 6360,767 

Disbursements 

o Operating Expenditures 5,707,052 

o Loan Repayments 500,000 

o Contribution Refunds 78,127 

o Other Disbursements 650 

Total Disbursements $6385,829 

Cash-on-hand @ December 31,2016^ $92369 

' OMFP received approximately 20,107 contributions firom 20,011 individuals. 

' As of the Candidate's date of ineligibility, Februaiy 1,2016, OMFP had received matching fiinds totaling 

$946,363. OMFP received an additional $142,364 by April 7,2016, for a total of $1,088,929. 

^ OMFP filed comprehensive amended disclosure reports on Januaiy 31,2017 along with the 2016 Year End 

Report. These corrections created a mathematical discrepancy of $ 17,431 in the. audited reports pertaining to the 

ending cash-on-hand. See Scope of Audit, p. 1. 
Part III 

Summaries 

Findings and Recommendations 

Finding 1. Net Outstanding Campaign Obligations 

The Audit staffs review of OMFP's financial activity through December 31,2017, and 

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

payments in excess of his entitlement. (For more detail, see p. 6.) 

Finding 2. Payments of Non-Qualified Expenses 

During audit fieldwork, the Audit staffs review of OMFP's disbursements indicated that 

OMFP spent $39,834 on behalf of the 0' Say Can You See Political Action Committee 

(OPAC). Since these funds were not spent in connection with the Candidate's 

nomination for election, they are considered non-qualified campaign expenses. The 

calculated repayment to the United States Treasuiy at a ratio of 23.37% is $9,309. OMFP 

representatives explained that OMFP was aware during the campaign that these were not 

qualified campaign expenses and expected OPAC's reimbursement for these expenses. 

The Audit staff analyzed all documentation pertaining to these disbursements and 

subsequent reimbursements and confirmed that OPAC reimbursed OMFP in full. Since 

the public funds were restored as a result of the reimbursement, the Audit staff will 

recommend that the Commission make no repayment determination. The Audit staff 

recommends that OMFP submit any comments that it considers relevant to this matter. 

(For more detail, see p. 9.) 

Finding 3. Failure to Itemize Offsets to Expenditures 

The Audit staff reviewed vendor refunds OMFP disclosed on Schedule A-P, Line 20 

(Offsets to Expenditures (Refunds, Rebates, etc.)) and detemniined that OMFP did not 

itemize 14 such refunds totaling $8,582. Subsequent to the audit notification, OMFP 

filed amended reports and materially disclosed Aese receipts. Since OMFP's corrective 

action occurred after audit notification, the matter is included in this audit report. The 

Audit staff recommends that OMFP provide any comments it deems necessary with 

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

Finding 4. Reporting of Debts and Obligations 

During audit fieldwork, the Audit staff noted that OMFP failed to disclose debts and 

obligations to one vendor totaling $156,019. The Audit staff recommends that, absent 

documentation demonstrating that these expenditures did not require reporting on 

Schedule D-P (Debts and Obligations), OMFP amend its disclosure reports to disclose 

these debts. (For more detail, see p. 12.) 
Finding 5. Stale-Dated Checks 

The Audit staff identified 12 stale-dated checks totaling $15,197 issued by OMFP. The 

Audit staff recommends that OMFP provide evidence that the checks are not outstanding 

or make a payment of $15,197 to the U.S. Treasury. (For more detail, see p. 13.) 

Summary of Amounts Owed to the United 

States Treasury 

• Finding 2. (p. 9) Payments of Non-Qualified 

Expenses 

$0 

• Findings, (p. 13) Stale-Dated Checks $15,197 

Total Due U.S. Treasury $ 15,197 
Part IV 

Findings and Recommendations 

I Finding 1. Set Outstanding Campaign Obligations 

Summary 

The Audit staffs review of OMFP's financial activity through December 31,2017, and 

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

payments in excess of his entitlement. 

Legal Standard 

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

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

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

among other things: 

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

committee and capital assets listed at their fair market value; 

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

• An estimate of necessary winding-down costs. 11 CFR §9034.5(a). 

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

occurs first: 

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

• The 30th day following the second consecutive prima^ in which the candidate 

receives less than 10 percent of the popular vote; 

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

party nominates its candidate for the general election; or 

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

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

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

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

campaign expense. 

• An expense that is: 

o 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 federal law or the law of the state 

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

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

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

regardless of when that expense is paid. 11 CFR §9034.4. 

• An expense associated with winding down the campaign and 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 for 

matchable contributions received and deposited on or before December 31" of the 

Presidential election year, provided that he or she still has net outstanding campaign debts 

on the day when the matching payments are made. 11 CFR §9034.1 (b). 

E. Value of Capital Assets. The fair market value of capital assets is 60% of the total 

original cost of the assets when acquired, except that assets that are received after the date 

of ineligibility must be valued at their fair market value on the date received. A 

candidate may claim a lower fair market value for a capital asset by listing the asset on 

the NOCO statement separately and demonstrating, through documentation, the lower 

fair market value. 11 CFR §9034.5(c)(l). 

F. Winding Down Costs. A primaiy election candidate who does not run in the general 

election may receive and use matching funds after notifying the Commission in writing 

of the candidate's withdrawal from the campaign for nomination or after the date of the 

party's nominating convention, if the candidate has not withdrawn before the convention. 

A primary election candidate who runs in the general election must wait until 31 days 

after the general election before using any matching funds for winding down costs, 

regardless of whether the candidate receives matching funds for the general election. 

11 CFR §9034.11(d). 

Facts and Analysis 

A. Facts 

The Candidate's date of ineligibility (DOl) was February 1,2016. The Audit staff 

reviewed OMFP's financial activity through December 31,2016; analyzed actual and 

projected winding down costs;^ and prepared the Statement of Net Outstanding 

Campaign Obligations that appears on the next page. 

The actual winding down costs were reviewed through December 31,2017. The projected winding down 

costs were estimated through December 31,2018. 
O'Malley for President 

Statement of Net Outstanding Campaign Obligations 

As of February 1,2016 

Prepared January 3,2018 

Assess 

Cash in Bank $ 181,638 [a] 

Accounts Receivable 

Security Deposits 27,074 

Physical Assets @ 60% depreciation 2.642 

Total Assets $211,354 

Liabilities 

Accounts Payable for Qualified Campaign Expenses as of 2/1/16 $ (224,863) 

Winding Down Costs: 

Actual Winding Down Costs Paid (2/2/16 - 12/31/17) (205,497) 

Estimated Winding Down Costs (1/1/18-12/31/18) (86.400^ fbl 

Total Liabilities $(516,760) 

Amounts Payable to the US Treasury 

• Stale Dated Checks (See Finding 5) (15.1971 

Net Outstanding Campaign Obligations (Deficit) as of February 1,2016 $ (320.6031 

Footnotes to NOCO Statement; 

[a] Amount includes contributions dated prior to DDI and deposited after DOl. 

[b] Estimated winding down costs will be compared to actual winding down costs and will be 

adjusted accordingly. 
Shown below are adjustments for funds received after the Candidate's DOl on February 

1,2016 through April 7,2016, the date OMFP received its last matching ftind payment. 

Net Outstanding Campaign Obligations (Deficit) as of 2/1/16 $ (320,603) 

Less: Contributions Received (2/2/16 - 4/7/16) 104,475 

Less: Matching Funds Received (2/2/16 - 4/7/16) 142,565 

Remaining Net Outstanding Campaign Obligations 

(Deficit) as of 4/7/16 

$(73,563) 

As presented above, OMFP has not received matching fund payments in excess of its 

entitlement. 

B. Preliminary Audit Report & Audit Division Recommendation 

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

OMFP representatives at the exit conference. Subsequently, the Audit staff provided the 

supporting calculations for the NOCO figures. OMFP representatives did not provide 

comments related to this matter. 

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

OMFP demonstrate any adjustments it believes are required in connection with any part 

of the audited NOCO statement or provide any other additional comments. 

Finding 2. Pa3nnents of Non-Qualified Eacpenses 

Summary 

During audit fieldwork, the Audit staffs review of OMFP's disbursements indicated that 

OMFP spent $39,834 on behalf of the O' Say Can You See Political Action Committee 

(OPAC).^ Since these funds were not spent in connection with the Candidate's 

nomination for election, they are considered non-qualified campaign expenses. The 

calculated repayment to the United States Treasury at a ratio of 23.37% is $9,309. OMFP 

representatives explained that OMFP was aware during the campaign that these were not 

qualified campaign expenses and expected OPAC's reimbursement for these expenses. 

The Audit staff analyzed all documentation pertaining to these disbursements and . 

subsequent reimbursements and confirmed that OPAC reimbursed OMFP in full. Since 

the public funds were restored as a result of the reimbursement, the Audit staff will 

recommend that the Commission make no repayment determination. The Audit staff 

recommends that OMFP submit any comments that it considers relevant to this matter. 

Legal Standard 

A. Qualified Campaign Expense. The legal standard in Finding 1 above pertaining to 

the qualified campaign expenses is incorporated herein. 

' OPAC is a qualified multi-candidate political action committee formed on July 18,2012. Initially 

OPAC supported and opposed more than one Federal candidate; however, OPAC amended its Form 1 

with the Commission on June 12,2015 to identify the Candidate as the sponsor of the Leadership PAC. 

OPAC has no affiliated committees. 
10 

B. Definition of Non-Qualified Campaign Expense. A non-qualified campaign 

expense is any expense that is not included in the definition of a qualified campaign 

expense (see above). 11 CFR §9034.4(b). 

C. Matching Funds Used for Non-Qualified Campaign Expenses. If the Commission 

determines that a campaign used matching funds for non-qualified campaign expenses, 

the candidate must repay the Secretary of the United States Treasury an amount equal to 

the amount of matching funds used for the non-qualified campaign expenses. 26 U.S.C. 

§9038(b)(2)(A). 

D. How to Determine Repayment Amount for Non-Qualified Campaign Expenses. 

The amount of any repayment sought under this section shall bear the same ratio to the 

total amount determined to have been used for non-qualified campaign expenses as the 

amount of matching funds certified to the candidate bears to the candidate's total 

deposits, as of 90 days after the candidate's date of ineligibility. 11 CFR 

§9038.2(b)(2)(iii). 

E. Notification of Repayment Obligation. The Commission will notify a candidate of 

any repayment determinations as soon as possible, but no later than three years after the 

close of the matching payment period. The Commission's issuance of the audit report to 

the candidate (under 11 CFR §9038.1(d)) will constitute notification for purposes of this 

section. 11 CFR §9038.2(aX2). 

Facts and Analysis 

A. Facts 

The Audit staff reviewed OMFP's disbursement records and identified the following 

three payments made by OMFP on behalf of OPAC: the first payment of $ 15,000 was 

made on May 18,2015; the second payment of $15,728 was made on June 1,2015; and 

the third payment of $9,106 was made on June 5,2015. OMFP made these 

disbursements totaling $39,834 to purchase social media advertising and to finance 

payroll on behalf of OPAC and confirmed that none of these expenses related to the 

presidential campaign. 

Since these expenses were not made in connection with the Candidate's campaign for the 

Democratic Party nomination for President, they would be considered non-qualified 

campaign expenses. It is apparent that OMFP used these public funds to defray nonqualified campaign expenses. When calculating a repayment determination, the Audit 

staff routinely examines all expenses regardless of when they were made. In this 

instance, in accordance with 11 CFR §9038.2(b)(2)(iii), the Audit staff calculated the 

ratio of repayment at 23.37%.'° Applying this ratio to the total non-qualified expenses of 

$39,834, die amount of repayment to the United States Treasury would equal $9,309. 

However, based on the documentation presented by OMFP, the Audit staff confirmed 

that OPAC reimbursed OMFP in full on August 20,2015. While it may have taken 

OPAC more than two months to reimburse OMFP, it repaid the total balance of public 

Matching hinds certified as of 90 days post-DOI divided by deposits for the Primary election as of 90 

days post-DOI (S1.088,929/$4,6S9.221=.2337). 
11 

funds spent on non-qualified campaign expenses of $39,834. By repaying all the 

borrowed funds from OMFP, OPAC restored the public funds that had been used for the 

non-qualified campaign expenses.'' This reimbursement ensured that OMFP was able to 

use the public funds to pay other qualified campaign expenses or to repay the U.S. . 

Treasury if OMFP had been in the position of carrying a surplus or it had received public 

funds in excess of its entitlement. Since the public funds spent on the non-qualified 

expenses have been restored via reimbursement from OPAC, no repayment to recoup 

public funds is warranted.'^ 

B. Preliminary Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to OMFP representatives at the exit conference 

along with schedules detailing the finding. OMFP representatives reiterated that they 

were aware all along of the fact that these expenditures did not represent qualified 

campaign expenses. For that reason, OMFP requested and received OPAC's 

reimbursement for these expenses in full. 

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

OMFP submit any comments it deems relevant to this matter. The Audit staff will make 

a recommendation that the Commission make no repayment determination. 

I Finding 3. Failure to Itemize Offsets to Expenditures | 

Summary 

The Audit staff reviewed vendor refunds OMFP disclosed on Schedule A-P, Line 20 

(Offsets to Expenditures (Refunds, Rebates, etc.)) and determined that OMFP did not 

itemize 14 such refunds totaling $8,582. Subsequent to the audit notification, OMFP 

filed amended reports and materially disclosed these receipts. Since OMFP's corrective 

action occurred after audit notification, the matter is included in this audit report. The 

Audit staff recommends that OMFP provide any comments it deems necessary with 

respect to this matter. 

Legal Standard 

A. When to Itemize. Authorized candidate committees must itemize: 

• Any person who provides a rebate, refund, or other offset to operating 

expenditures to the reporting committee in an aggregate amount or value in excess 

of $200 within the election cycle, together with the daite and amount of such 

receipt. 52 U.S.C. §30104(b)(3)(F). 

B. 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. 11 CFR 

§100.3(b). 

12 

OMFP's payment of $39,834 deemed as non-qualified campaign expenses less OP AG's fill! repayment 

of $39,834 equals zero. Since these activities occurred prior to the DOI, they are not reflected on the 

NOCO statement. 

A repayment determination is meant for the government to recoup money that was spent in violation of 

the conditions of receiving matching funds, not to be a penalty. Since OMFP's fiinds were restored via 

OPAC's reimbursement, any repayment determination would be a penalty. Kennedy for President 

Committee v. Federal Ejection Commission, 734 F.2d 1558,1562 (D.C. Cir. 1984). 
12 

C. Definition of Itemization. Itemization of contributions received means that the 

recipient committee discloses, on a separate schedule, the following information: 

• The amount of the contribution; 

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

• The full name and address of the contributor; 

• In the case of contributions from individual contributors, the contributor's 

occupation and the name of his or her employer; and 

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

CFR §§100.12 and 104.3(a)(4). 

Facts and Analsrsis 

A. Facts 

During audit fieldwork, the Audit staif reviewed all vendor refunds and rebates received 

by OMFP, and identified 14 such refunds totaling $8,582 that were not itemized on 

Schedule A-P, Line 20 of OMFP's disclosure reports, as required. 

OMFP filed amended disclosure reports subsequent to the audit notification and 

materially corrected these itemization errors. Since OMFP's corrective action occurred 

after audit notification, the matter is included in this audit report. 

B. Preliminary Audit Report & Audit Divisiou Recommeudatiou 

The Audit staff presented this matter to OMFP representatives at the exit conference 

along with schedules detailing the finding. OMFP representatives stated that OMFP 

amended its disclosure reports after the audit notification and disclosed the majority of 

these refunds. 

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

OMFP provide any comments that it deems necessary with respect to this matter. 

Finding 4. Reporting of Debts and Obligations 

Summary 

During audit fieldwork, the Audit staff noted that OMFP failed to disclose debts and 

obligations to one vendor totaling $156,019. The Audit staff recommends that, absent 

documentation demonstrating that these expenditures did not requjre reporting on 

Schedule D-P (Debts and Obligations), OMFP amend its disclosure reports to disclose 

these debts. 

Legal Standard 

A. CoutiuuGus Reporting Required. A political committee must disclose the amount 

and nature of outstanding debts and obligations until those debts are extinguished. 52 

U.S.C. §30I04(b) and 11 CFR §§I04.3(d) and I04.11(a). 

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

owed by the committee and debts owed to the committee, together with a statement 
13 

explaining the circumstances and conditions under which each debt and obligation 

was incurred or extinguished. II CFR § 104.11 (a). 

C. Itemizing Debts and Obligations. 

• A debt of $500 or less must be reported once it has been outstanding 60 days from 

the date incurred (the date of the transaction); the committee reports it on the next 

regularly scheduled report. 

• A debt exceeding $500 must be disclosed in the report that covers the date on 

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

Facts and Anal3r8is 

A. Facts 

During audit fieldwork, the Audit staff used available disbursement records to reconcile'^ 

the account of one of the OMFP's largest vendors, American Express. The vendor 

provided the credit card services that OMFP used on a daily basis to purchase various 

goods and services including advertising, ballot access consulting, compliance 

consulting, database management, digital consulting, direct mail, food and beverage, 

office equipment, etc. The unreported debt balances totaling $156,019 should initially 

have been disclosed on Schedule D-P for the 2015 October Quarterly Report and the 

2016 February Monthly Report.'* 

B. Preliminary Audit Report & Audit Division Recommendation 

The Audit staff presented this matter to OMFP representatives at the exit conference and 

provided schedules detailing the unreported debts for each audited reporting period. 

OMFP did not provide comments related to this matter. 

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

OMFP provide documentation demonstrating that these expenditures did not require 

reporting on Schedule D-P. Absent such documentation, the Audit staff recommends that 

OMFP amend its reports to disclose the unreported debts of $156,019. 

I Finding 5. Stale-Dated Checks 

Summary 

The Audit staff identified 12 stale-dated checks totaling $15,197 issued by OMFP. The 

Audit staff recommends that OMFP provide evidence that the checks are not outstanding 

or make a payment of $15,197 to the U.S. Treasury. 

" The reconciliation consisted of calculating invoiced and paid amounts for individual reporting periods in 

the 20IS-2016 campaign cycle. The Audit staff then determined whether any outstanding debts were 

correctly disclosed on Schedule D-P. Each debt amount was counted once, even if it required disclosure 

over multiple reporting periods. 

These reports covered periods July 1,201S - September 30,2015 and January 1,2016 - January 31, 

2016, respectively. OMFP paid off the balances in the subsequent reporting periods; the 2015 Year-End 

Report and the 2016 March Monthly Report. 
14 

Legal Standard 

Handling Stale-Dated (Uncashed) Checks. If a committee has issued checks that the 

payees (creditors or contributors) have not cashed, the committee must notify the 

Commission of its efforts to locate the payees and encourage them to cash the 

outstanding checks. The committee must also submit a check payable to the U. S. 

Treasury for the total amount of the outstanding checks. 11 CFR §9038.6. 

Facts and Analysis 

A. Facts 

The Audit staffs reconciliation of OMFP's bank accounts through December 31,2016, 

identified 12 stale-dated checks totaling $15,197 issued by OMFP. The checks were 

dated between June 9,2015 and December 14,2016 and had not cleared the bank as of 

December 31,2017'^ 

B. Preliminary Audit Report & Audit Division Recommendation 

The Audit staff provided OMFP a schedule of stale-dated checks at the exit conference. 

OMFP did not provide comments on this finding. 

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

OMFP demonstrate that: 

• The checks are not outstanding by providing copies of the front and back of the 

negotiated checks along with bank statements; or 

• The outstanding checks have been voided by providing either: 

o Copies of the voided check with evidence that no obligation exists, or 

o Copies of the front and back of negotiated replacement checks along with 

bank statements. 

• Absent such evidence, the Audit staff recommends that $ 15,197 be paid to the 

U.S. Treasury; or 

• If funds are not available to make the necessary refunds, OMFP should disclose 

the contributions requiring refunds on Schedule D-P until funds become available 

" to make such refunds. 

The Audit staff conducted a limited review of financial activity through December 31,2017 in order to 

determine whether the stale-dated checks had been cashed by the recipients and cleared the bank prior to 

the issuance of this report.