Draft Final Audit Report of the 

Audit Division on the Caesars 

Entertainment Corporation 

Political Action 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 have met 

the threshold 

requirements for 

substantial compliance 

with the Act.' The audit 

determines whether the 

committee complied with 

the limitations, 

prohibitions and 

disclosure requirements 

of the Act. 

About the Committee (p. 2) 

The Caesars Entertainment Corporation Political Action 

Committee is a non-party separate segregated fimd of Caesars 

Entertainment Corporation, headquartered in Las Vegas, Nevada. 

For more information, see the chart on the Committee 

Organization, p. 2. 

Financial Activity (p. 2) 

• Receipts 

o Contributions from Individuals $ 328,196 

Total Receipts $ 328,196 

• Disbursements 

o Contributions to Federal 

Candidates/Other Committees $ 308,430 

o Operating Expenditures 18,909 

o Other Disbursements 20,126 

Total Disbursements $ 347,465 

Finding and Recommendation (p. 3) 

Misstatement of Financial Activity 

Future Action 

The Commission may 

initiate an enforcement 

action, at a later time, 

with respect to any matter 

discusseid in this report. 

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

Audit Division on the 

Caesars Entertainment 

Corporation Political Action 

Committee 

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

Page 

Part I. Background 

Authority for Audit 1 

Scope of Audit 1 

Part II. Overview of Conmiittee 

Committee Organization 2 

Overview of Financial Activity 2 

Part III. Summary 

Finding and Recommendation 3 

Part IV. Finding and Recommendation 

Misstatement of Financial Activity 4 
Parti 

Background 

Authority for Audit 

This report is based on an audit of the Caesars Entertainment Corporation Political 

Action Committee (CECPAC)^, 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 intemal 

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, this audit examined: 

1. the consistency between reported figures and bank records; 

2. the disclosure of individual contributors' occupation and name of employer; and 

3. other committee operations necessary to the review. 

^ Ttie committee's name during the audit period was Caesars Entertainment Political Action Committee. It 

was changed on June 4,2013. 
Part II 

Overview of Coinmittee 

Committee Organization 

Important Dates 

• Date of Registration December 11,1989 

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

Headquarters Las Vegas, Nevada 

Bank Information 

• Bank Depositories One 

• Bank Accounts One Federal 

Treasurer 

• Treasurer When Audit Was Conducted Meredith Hartstem 

• Treasurer During Period Covered by Audit Meredith Hartstem 

Management Information 

• Attended Commission Campaign Finance 

Seminar 

Yes 

• Who Handled Accounting and 

Recordkeeping Tasks 

Paid Staff 

Overview of Financial Activity 

(Audited Amounts) 

Cash-on-hand @ January 1,2011 $ 132,248 

Receipts 

o Contributions from Individuals 328,196 

Total Receipts $ 328,196 

Disbursements 

o Contributions to Federal Candidates/Other 

Committees 

308,430 

o Operating Expenditures 18,909 

o Other Disbursements 20,126 

Total Disbursements $ 347,465 

Cash-on-hand @ December 31,2012 $ 112,979 
Part in 

Summary 

Finding and Recommendation 

Misstatement of Financial Activity 

During audit fieldwork, a comparison of CECPAC's reported financial activity with 

its bank records revealed a misstatement of receipts and the beginning and ending 

cash balances for 2011 and receipts, disbursements, and the beginning and ending 

cash balances for 2012. For 2011, CECPAC understated the beginning cash balance 

by $38,481, understated receipts by $6,701, and understated the ending cash balance 

by $44,997. For 2012, CECPAC understated receipts by $9,995, disbursements by 

$22,265, and the ending cash balance by $32,727. Following the exit conference held 

at the end of audit fieldwork, CECPAC amended its reports to materially correct these 

misstatements. 

In addition, CECPAC's original reports for 2011 and 2012 materially understated 

receipts and disbursements. Specifically, CECPAC's original reports understated 

receipts by $151,950 and understated disbursements by $91,495. Amended reports 

filed prior to the notification of this audit did not correct the misstated financial 

activity. 

In response to the Interim Audit Report recommendations, CECPAC stated that it 

would not submit an additional response since, in response to the audit, it had already 

filed amended reports that materially corrected the misstatements. CECPAC also 

indicated that it would implement more rigorous intemal reviews as well as periodic 

financial reconciliations. (For more detail, see p. 4.) 
Part IV 

Finding and Recommendation 

Misstatement of Financial Activity 

Summary 

During audit fieldwork, a comparison of CECPAC's reported financial activity with 

its bank records revealed a misstatement of receipts and the beginning and ending 

cash balances for 2011 and receipts, disbursements, and the begiiming and ending 

cash balances for 2012. For 2011, CECPAC understated the begiiming cash balance 

by $38,481, understated receipts by $6,701, and understated the ending cash balance 

by $44,997. For 2012, CECPAC understated receipts by $9,995, disbursements by 

$22,265, and the ending cash balance by $32,727. Following the exit conference held 

at the end of audit fieldwork, CECPAC amended its reports to materially correct these 

misstatements. 

In addition, CECPAC's original reports for 2011 and 2012 materially understated 

receipts and disbursements. Specifically, CECPAC's original reports understated 

receipts by $151,950 and understated disbursements by $91,495. Amended reports 

filed prior to the notification of this audit did not correct the misstated financial 

activity. 

In response to the Interim Audit Report recommendations, CECPAC stated that it 

would not submit an additional response since, in response to the audit, it had already 

filed amended reports that materially corrected the misstatements. CECPAC also 

indicated that it would implement more rigorous intemal reviews as well as periodic 

financial reconciliations. 

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 calendar year; 

• the total amount of disbursements for the reporting period and for the calendar 

year; and 

• certain transactions that require itemization on Schedule A (Itemized 

Receipts) or Schedule B (Itemized Disbursements). 2 U.S.C. §434(b) (1), (2), 

(3), (4) and (5). 
Facts and Aaalysis 

A. Misstatement of Financial Activity - 2011 and 2012 

1. Facts 

As part of this audit, the Audit staff reconciled CECPAC's reported financial 

activity with its bank records for calendar years 2011 and 2012. The following 

charts outline the discrepancies between CECPAC's disclosure reports and its 

bank records. Succeeding paragraphs explain why the discrepancies occurred. 

2011 Committee Activity 

Reported Bank Records Discrepancy 

Begiiming Cash Balance @ 

January 1,2011 

$93,767 $132,248 $38,481 

Understated 

Receipts $155,900 $162,601 $6,701 

Understated 

Disbursements $181,258 $181,443 $185 

Understated 

Ending Cash Balance 

@ December 31,2011 

$68,409 $113,406 $44,997 

Understated 

The beginning cash balance was understated by $38,481 and the discrepancy is 

unexplained, but it likely resulted from prior period discrepancies. 

The $6,701 understatement of receipts was a result of contributions from 

individuals, totaling $6,681, that were not reported and an unexplained difference 

of $20. 

The $44,997 understatement of the ending cash balance was a result of the 

reporting discrepancies described above as well as the $185 understatement of 

disbursements. 

2012 Committee Activity 

Reported Bank Records Discrepancy 

Beginning Cash Balance @ 

January 1,2012 

$68,409 $113,406 $44,997 

Understated 

Receipts $155,600 $165,595 $9,995 

Understated 

Disbursements $143,757 $166,022 $22,265 

Understated 

Ending Cash Balance 

@ December 31,2012 

$80,252 $112,979 $32,727 

Understated 

The understatement of receipts was the result of contributions from individuals, 

totaling $9,995, that were not reported. 
The $22,265 net understatement of disbursements was a result of contributions to 

federal candidates/other committees, totaling $22,500, that were not reported, and 

an unexplained difference of ($235). 

The $32,727 understatement of the ending cash balance was a result of the 

reporting discrepancies noted above. 

CECPAC filed amended reports on Febmary 20 and 21,2013, subsequent to the 

Audit Notification Letter dated December 4,2012. These reports disclosed 

previously unreported contributions from individuals totaling $9,995. However, 

the amended reports disclosed only $5,000 of the previously unreported 

contributions to federal candidates and/or other committees totaling $22,500. 

Thus, the disbursements remained materially misstated for calendar year 2012. 

2. Interim Audit Report and Audit Division Recommendation 

The Audit staff discussed the misstatements for 2011 and 2012 with CECPAC's 

representative during the exit conference and provided copies of relevant work 

papers detailing the misstatements. In response, CECPAC filed amended reports 

that materially corrected the misstatements. 

The Interim Audit Report recommended that CECPAC provide any additional 

comments it considered necessary with respect to this matter. 

3. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, CECPAC stated that it 

would not submit an additional response since it had already filed amended 

reports that materially corrected the misstatements. 

B. Misstatement of Financial Activity - Increased Activity 

1. Facts 

In addition to examining CECPAC's most recent reports filed prior to the audit 

notification, the Audit staff compared CECPAC's originally filed reports with 

bank records and discovered a $151,950 understatement of receipts and a $91,495 

understatement of disbursements over the two-year period (2011 and 2012). 

These figures include the $6,701 understatement of receipts from 2011 and the 

$9,995 and $22,265 understatement of receipts and disbursements, respectively, 

from 2012 discussed in Section A (Misstatement of Financial Activity - 2011 and 

2012)1 

2. Interim Audit Report and Audit Division Recommendation 

^ The amended reports reviewed by the Audit staff to determine the misstatements identified in 

Section A did not correct all the misstated activity identified by the Audit staff in its review of 

CECPAC originally filed reports. However, in response to this audit, CECPAC filed amendments to 

materially correct the misstated activity identified by the Audit staff. 
The Audit staff discussed the understatement of receipts and disbursements on its 

original reports filed with the CECPAC representative during the exit conference 

and provided copies of relevant work papers detailing the receipts and 

disbursements not reported. In response, the CECPAC representative stated that 

the management was not aware that the original reports contained only partially 

reported receipts and/or disbursements. As a result, CECPAC management 

indicated it would implement more rigorous intemal reviews as well as periodic 

financial reconciliations. 

The Interim Audit Report recommended that CECPAC provide any additional 

comments it considered necessary with respect to the misstatement of activity on 

its original reports. 

3. Committee Response to Interim Audit Report 

In response to the Interim Audit Report recommendation, CECPAC stated that it 

would not submit an additional response with respect to the misstatements 

identified on its original reports.