U.S. ELECTION ASSISTANCE 

COMMISSION 

OFFICE OF INSPECTOR GENERAL 

FINAL REPORT: 

Administration of Payments Received 

Under the Help America Vote Act by the 

Nevada Secretary of State 

APRIL 30, 2003 THROUGH DECEMBER 31, 2010 

Report No. 

E-HP-NV-02-11 

September 2011 
 

 

 

 

 

 

 

 

 

 

 

U.S. ELECTION ASSISTANCE COMMISSION
 

OFFICE OF INSPECTOR GENERAL
 

1201 New York Ave. NW - Suite 300
 

Washington, DC 20005
 

September 30, 2011 

Memorandum 

To:	 Thomas Wilkey 

Executive Director 

From:	 Curtis W. Crider 

Inspector General 

Subject: Final Audit Report - Administration of Payments Received Under the Help 

America Vote Act by the Nevada Secretary of State (Assignment Number EHP-NV-02-11) 

We contracted with the independent certified public accounting firm of Clifton 

Gunderson LLP (Clifton Gunderson) to audit the administration of payments received 

under the Help America Vote Act (HAVA) by the Nevada Secretary of State (SOS). The 

contract required that the audit be done in accordance with U.S. generally accepted 

government auditing standards. Clifton Gunderson is responsible for the attached 

auditor’s report and the conclusions expressed therein. 

In its audit of the SOS, Clifton Gunderson concluded that, except for the lack of 

personnel certifications, the inadequate property records maintenance, the non-transfer of 

interest earnings to the election fund, the use of computer equipment for non-HAVA 

related purposes and the questionable use of HAVA funds for promotional activities, our 

audit concluded that the SOS generally accounted for and expended HAVA funds in 

accordance with the HAVA requirements and complied with the financial management 

requirements established by the U.S. Election Assistance Commission. The SOS also 

complied with section 251 requirements. 

In his August 29, 2011 response to the draft report (Appendix A-1), the SOS 

generally agreed with the report’s findings and recommendations, and provided 

corrective action; however, the SOS took exception to the questioned costs related to the 

promotional activities, but has taken action on or is working to resolve the other 

exceptions. 

Also, we have included in the report the EAC response to the draft report 

(Appendix A-2), dated September 8, 2011, which stated the action proposed to assist the 

SOS in resolving the findings and recommendations. We would appreciate being kept 

informed of the actions taken on our recommendations as we will track the status of their 

implementation. Please respond in writing to the finding and recommendation included in 

this report by November 30, 2011. Your response should include information on actions 

taken or planned, targeted completion dates, and titles of officials responsible for 

implementation. 
 

The legislation, as amended, creating the Office of Inspector General (5 U.S.C. § 

App.3) requires semiannual reporting to Congress on all audit reports issued, actions 

taken to implement audit recommendations, and recommendations that have not been 

implemented. Therefore, this report will be included in our next semiannual report to 

Congress. 

If you have any questions regarding this report, please call me at (202) 566-3125. 
PERFORMANCE AUDIT REPORT
 

ADMINISTRATION OF PAYMENTS RECEIVED
 

UNDER THE
 

HELP AMERICA VOTE ACT
 

BY THE
 

STATE OF NEVADA
 

April 30, 2003 Through December 31, 2010
 

UNITED STATES
 

ELECTION ASSISTANCE COMMISSION
 


 
 

 

 

 

 

 

 

TABLE OF CONTENTS 

PAGE
 

EXECUTIVE SUMMARY ............................................................................................................1
 

BACKGROUND

APPENDICES
 

..........................................................................................................................2
 

AUDIT OBJECTIVES .................................................................................................................3
 

SCOPE AND METHODOLOGY .................................................................................................4
 

AUDIT RESULTS .......................................................................................................................4
 

Appendix A-1: Secretary of State Responses to Draft Report.............................................12
 

Appendix A-2: U. S. Election Assistance Commission Response to Draft Report.............16
 

Appendix B: Audit Methodology............................................................................................17
 

Appendix C: Monetary Impact as of December 31, 2010......................................................18
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Election Assistance Commission
 

Performance Audit of the Administration of Payments Received Under the
 

Help America Vote Act by the State of Nevada
 

EXECUTIVE SUMMARY 

Clifton Gunderson LLP was engaged by the U.S. Election Assistance Commission (EAC or the 

Commission) Office of Inspector General to conduct a performance audit of the Nevada 

Secretary of State (SOS) for the period April 30, 2003 through December 31, 2010 to determine 

whether the SOS used payments authorized by Sections 101, 102, and 251 of the Help America 

Vote Act of 2002 (HAVA or the Act) in accordance with HAVA and applicable requirements; 

accurately and properly accounted for program income and property purchased with HAVA 

payments, and met HAVA requirements for Section 251 funds for an election fund and for a 

matching contribution. 

Our audit did not include a determination that the SOS and its sub grantees met the 

requirements for maintenance of a base level of state outlays, commonly referred to as 

Maintenance of Expenditures (MOE). On June 28, 2010, the Commission issued a revised 

definitive policy on the requirements for the MOE. The policy included a provision that the states 

will have 12 months from the date of the revised policy to voluntarily submit a revised MOE plan 

to the EAC. Accordingly, our scope of audit did not include a determination of whether the SOS 

and its subgrantees met the requirements for MOE. 

In addition, the Commission requires states to comply with certain financial management 

requirements, specifically: 

•	 Comply with the Uniform Administrative Requirements for Grants and Cooperative 

Agreements with State and Local Governments (also known as the “Common Rule”) as 

published in the Code of Federal Regulations 41 CFR 105-71. 

•	 Expend payments in accordance with cost principles for establishing the allowance or 

disallowance of certain items of cost for federal participation issued by the Office of 

Management and Budget (OMB) in Circular A-87. 

•	 Submit detailed annual financial reports on the use of Title I and Title II payments. 

We conducted this performance audit in accordance with Generally Accepted Government 

Auditing Standards. Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained provides a reasonable 

basis for our findings and conclusions based on the audit objectives. Because of inherent 

limitations, a study and evaluation made for the limited purposes of our review would not 

necessarily disclose all weaknesses in administering HAVA payments. 

Except for the issues discussed below, our audit concluded that the SOS generally accounted 

for and expended HAVA funds in accordance with the requirements mentioned above for the 

period from April 30, 2003 through December 31, 2010. The exceptions needing SOS’s 

management attention are as follows: 

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1.	 The State of Nevada’s SOS charged $744,894 in payroll expenses to the HAVA election 

account prior to July 1, 2010 which were not supported by documentation to verify that 

the employees worked full-time on HAVA activities 

2.	 The state’s inventory listings of voting equipment located at the counties did not conform 

to the requirements of 41 C.F.R. 105-71.132 (d)(1), (the Common Rule). Various 

required information were missing from the listings, including source of property, who 

holds title, location, acquisition date, condition of property, cost, and percentage of 

federal participation in the cost. At two locations we visited to test equipment for 

existence, there was equipment listed in the wrong location or not located. 

3.	 The state treasurer did not transfer interest earnings totaling $16,777 to the HAVA 

election account for May and June 2003. The HAVA election account is also missing the 

interest that would have accumulated as a result of the compounding effect had the 

interest been deposited timely. 

4.	 One of the five counties we visited was using the HAVA funded computer equipment 

acquired for the Statewide Voter Registration System (SVRS), costing $16,434, primarily 

for daily operations rather than restricting its use to HAVA related activities. 

5.	 Unallowable SOS HAVA expenses of $20,000 used to support the National Women’s 

Suffrage Day activities in 2007. 

6.	 Unallowable SOS HAVA expenses of $25,000 used to produce videos to promote voting 

participation and to conduct other events and programs to encourage registration and 

participation in upcoming elections in 2008. 

We have included in this report as Appendix A-1 the SOS management’s formal response on 

August 29, 2011 to our draft report. Although we have included management’s written responses 

to the draft report, such responses have not been subjected to the audit procedures and, 

accordingly, we do not provide any form of assurance on the appropriateness of the responses 

or the effectiveness of the corrective actions described therein. 

BACKGROUND 

HAVA created the Commission to assist states and insular areas with the improvement of the 

administration of federal elections and to provide funds to states to help implement these 

improvements. HAVA authorizes payments to states under Titles I and II, as follows: 

•	 Title I, Section 101 payments are for activities such as complying with Title III of HAVA for 

uniform and nondiscriminatory election technology and administration requirements, 

improving the administration of elections for federal office, educating voters, training 

election officials and poll workers, and developing a state plan for requirements 

payments. 

•	 Title I, Section 102 payments are available only for the replacement of punch card and 

lever action voting systems. 

•	 Title II, Section 251 requirements payments are for complying with Title III requirements 

for voting system equipment; and for addressing provisional voting, voting information, 

statewide voter registration lists, and voters who register by mail. 

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Title II also requires that states must: 

•	 Have appropriated funds “equal to 5 percent of the total amount to be spent for such 

activities [activities for which requirements payments are made].” [Section 253(b)(5)]. 

•	 “Maintain the expenditures of the state for activities funded by the [requirements] payment 

at a level that is not less than the level of such expenditures maintained by the state for 

the fiscal year ending prior to November 2000.” [Section 254 (a)(7)]. 

•	 Establish an election fund for amounts appropriated by the state “for carrying out the 

activities for which the requirements payment is made,” for the federal requirements 

payments received, for “such other amounts as may be appropriated under law,” and for 

“interest earned on deposits of the fund.” [Section 254 )(b)(1)]. 

AUDIT OBJECTIVES 

The objectives of our audit were to determine whether the Nevada SOS: 

1.	 Used payments authorized by Sections 101, 102, and 251 of HAVA in accordance with 

HAVA and applicable requirements; 

2.	 Accurately and properly accounted for property purchased with HAVA payments and for 

program income; 

3.	 Met HAVA requirements for Section 251 funds for an election fund and for a matching 

contribution except for the requirements for maintenance of a base level of state outlays, 

commonly referred to as Maintenance of Expenditures (MOE). On June 28, 2010, the 

Commission issued a revised definitive policy on the requirements for the MOE. The 

policy included a provision that the states will have 12 months from the date of the 

revised policy to voluntarily submit a revised MOE plan to the EAC. Accordingly, our 

scope of audit did not include a determination of whether the SOS and its subgrantees 

met the requirements for MOE. 

In addition to accounting for HAVA payments, the Act requires states to maintain records that 

are consistent with sound accounting principles that fully disclose the amount and disposition of 

the payments, that identify the project costs financed with the payments and other sources, and 

that will facilitate an effective audit. The Commission requires states receiving HAVA funds to 

comply with certain financial management requirements, specifically: 

1.	 Comply with the Uniform Administrative Requirements for Grants and Cooperative 

Agreements with State and Local Governments (also known as the “Common Rule”) as 

published in the Code of Federal Regulations at 41 CFR 105-71. 

2.	 Expend payments in accordance with cost principles for establishing the allowance or 

disallowance of certain items of cost for federal participation issued by the OMB. 

1

3. Submit detailed annual financial reports on the use of Title I and Title II payments.

1 EAC requires states to submit annual reports on the expenditure of HAVA Sections 101, 102, and 251 funds. 

Through December 31, 2008, for Sections 101 and 102, reports were due on February 28 for the activities of the 

previous calendar year, and, for Section 251, reports were due by March 30 for the activities of the previous fiscal 

year ending on September 30. Beginning in calendar year 2009, all reports will be effective as of September 30, 

20XX for the fiscal year ended that date and will be due by December 31, 20XX. 

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SCOPE AND METHODOLOGY 

We audited the HAVA funds received and disbursed by the SOS from April 30, 2003 through 

December 31, 2010 (92-month period) as shown in the following table: 

FUNDS RECEIVED 

TYPE OF EAC PROGRAM STATE INTEREST TOTAL FUNDS DATA
 

PAYMENT PAYMENT INCOME MATCH EARNED AVAILABLE DISBURSED AS OF
 

Section 101 $ 5,000,000 $ 0 $ 0 $ 432,449 $ 5,432,449 $ 4,321,407 12/31/2010 

Section 102 0 0 0 0 0 0 12/31/2010 

Section 251 18,144,727 0 954,986 1,225,063 20,324,776 15,265,280 12/31/2010 

Total $23,144,727 $ 0 $954,986 $1,657,512 $25,757,225 $19,586,687 12/31/2010 

Our audit methodology is set forth in Appendix C. 

AUDIT RESULTS 

We conducted this performance audit in accordance with Generally Accepted Government 

Auditing Standards. Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. We believe that the evidence obtained provides a reasonable 

basis for our findings and conclusions based on the audit objectives. Because of inherent 

limitations, a study and evaluation made for the limited purposes of our review would not 

necessarily disclose all weaknesses in administering HAVA payments. 

Except for the lack of personnel certifications, the inadequate property records maintenance, the 

non-transfer of interest earnings to the election fund, the use of computer equipment for nonHAVA related purposes and the questionable use of HAVA funds for promotional activities, our 

audit concluded that the SOS generally accounted for and expended HAVA funds in accordance 

with the requirements mentioned above. The SOS took exception to the questioned costs 

related to the promotional activities, but has taken action on or is working to resolve the other 

exceptions described below as set forth in Appendix A: 

I. Lack of Personnel Certifications 

The State of Nevada’s Office of the Secretary of State (SOS) charged a total of $894,306 in 

payroll expenses to the Help America Vote Act (HAVA) election fund between May 2003 and 

December 31, 2010. The total was comprised of $794,331 paid to SOS staff working full-time 

on HAVA activities and $99,975 paid to information technology (IT) staff working part-time on 

the statewide voter registration system (SVRS). 

We selected a sample of six (6) full-time staff pay periods for testing with total payroll charges of 

$32,191. We question $28,180 of the total payroll charges tested because of lack of 

documentation to support the salaries as required by OMB Circular A-87, Cost Principles for 

State, Local, and Indian Tribal Governments. The questioned payroll charges were for the SOS 

full-time staff that did not have semi-annual certifications that they worked only on HAVA related 

activities, or their time cards did not indicate that the work was for HAVA related activities. The 

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SOS began requiring the semi-annual certifications for the six months period ended December 

31, 2010, which provided support for the $49,437 full-time payroll charges. 

Based on the internal control weaknesses and exceptions explained above, we question all fulltime staff’s payroll charges from inception to June 30, 2010 for lack of appropriate 

documentation. These charges amounted to $744,894 ($794,331, less $49,437 total supported 

charges). 

OMB Circular A-87, in Attachment B Section 8(h)(3) requires that: 

(3)	 Where employees are expected to work solely on a single federal award or cost 

objective, charges for their salaries and wages will be supported by periodic 

certifications that the employees worked solely on that program for the period 

covered by the certification. These certifications will be prepared at least semiannually and will be signed by the employee or supervisory official having firsthand 

knowledge of the work performed by the employee. 

Recommendation: 

1.	 We recommend that the EAC resolve with the SOS the appropriate corrective action 

regarding the completion of the semi-annual certifications. 

SOS Response: 

The SOS official stated that the personnel costs were paid from a legislatively approved special 

revenue budget account, Election Fund, established for the specific purpose of segregating 

funds from other state accounts or general funds. The salaries for the full-time HAVA staff were 

paid solely from this account, and only work on HAVA related activities qualified for these 

expenditures. The SOS official confirmed that the full-time HAVA employees only performed on 

HAVA related activities. They stated that since notification of the missing certifications, the 

documentation had been completed for the last six months of 2010 and the first six months of 

2011, and a calendaring system had been implemented to ensure semi-annual certifications are 

completed. They also indicated the SOS office was open to suggestions from the Inspector 

General or EAC regarding providing assurances for salaries for past HAVA-related work. 

II.	 Property Management 

Our review of the statewide master inventory records disclosed that the records for the different 

locations do not contain all information in varying degrees as required in 41 CFR § 105­

71.132(d)(1), referred to as the Common Rule. The following discrepancies were noted: 

•	 One county - Records are missing source, title, acquisition date, unit price, and use and 

condition. 

•	 Ten counties – Records are missing acquisition date and unit price. 

•	 One county – Records are missing source, title, acquisition date, unit price, federal 

percentage, location, and use and condition. 

•	 Two counties – Records are missing acquisition date, unit price, and location. 

•	 One county – Records are missing unit price. 

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•	 Las Vegas Secretary of State Storage – Three (3) inventory items listed and selected for 

testing had been transferred to another location, and were improperly reported as being 

held in the Las Vegas storage location. 

Also, in our site visits to five counties, we identified the following discrepancies in two location’s 

equipment records: 

•	 Las Vegas Secretary of State Storage – One (1) F-5 DNS Controller 520 was not 

located. 

•	 One county – One (1) Sequoia Audio Headset was not located. 

The Uniform Administrative Requirements for Grants and Cooperative Agreements with State 

and Local Governments 41 CFR § 105-71.132 (the “Common Rule”) states that: 

(d)(1)	 Property records must be maintained that include a description of the property, 

serial number or other identification number, the source of property, who holds the 

title, the acquisition date, and costs of the property, percentage of Federal 

participation in the cost of the property, the locations, use and condition of the 

property, and any ultimate disposition data including the date of disposal and sale 

price of the property. 

The Uniform Administrative Requirements for Grants and Cooperative Agreements with State 

and Local Governments 41 CFR § 105-71.132 (f) states that: 

(f) In the event a grantee or subgrantee is provided federally-owned equipment: 

(2)	 Grantees or subgrantees will manage the equipment in accordance with 

Federal agency rules and procedures, and submit an annual inventory listing. 

Recommendations: 

We recommend that the SOS: 

2.	 Ensure that the counties document at least the minimum information in the property records 

in accordance with 41 CFR § 105-71.132(d)(1). 

3.	 Require counties to conduct a physical inventory of all HAVA funded equipment in their 

possession and provide these results to the state for reconciliation with and updating of the 

statewide master inventory list. 

SOS Response: 

The SOS official stated that county property records have been formatted to capture the 

required Common Rule information, and will be distributed to the counties to conduct a physical 

inventory of all HAVA funded equipment in their possession. County officials will be required to 

sign an acknowledgement annually regarding the accuracy of the list, date it, and provide the 

results for the state to use to update the statewide master inventory list. 

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III. Interest Earnings 

Nevada established an election account to hold Help America Vote Act (HAVA) funds in 

accordance with the requirements of HAVA Section 254(b)(1). HAVA also requires the interest 

earned from the investment of the monies be deposited into the election account. The timely 

deposit of interest earnings produces a compounding effect that adds additional funds to the 

program. 

Nevada received a Section 101 installment payment of $5,000,000 on April 30, 2003; however, 

the state treasurer did not begin transferring interest earned on these funds into the election 

account until July 2003. Based on rates provided us by the state treasurer, we determined that 

there is a total of $16,777 of interest that should be transferred to the election account for May 

and June 2003, plus the compounded interest on these funds until the date of the transfer. 

HAVA Section 254 (b) (1) requires that the following monies be deposited into the state’s 

election account: 

D. Interest earned on deposits of the fund. 

Recommendation: 

4.	 We recommend that the EAC work with Nevada officials to verify and transfer the amount of 

interest owed to the election account for the period from May 1, 2003 through June 30, 

2003, plus the additional compounded interest as of June 30, 2003, and any additional 

compounded interest owed through the date of the transfer. 

SOS Response: 

The SOS’ office determined that the election fund is eligible for the interest, and sent a letter to 

the treasurer’s office asking that correct deposits be made to the HAVA account, including the 

compounding interest, and requested that the calculations used to determine the interest 

shortfall be provided to ensure the correct amount is transferred. 

The Treasurer’s office has transferred $20,838.37 to the HAVA account covering the period 

from May 1, 2003 through June 30, 2003 plus the compounded interest through the date of the 

transfer. 

IV. Property Usage 

During our observation and testing of property and equipment in one of the counties’ municipal 

offices, we noted that the state’s inventory listing included HAVA funded computer equipment, 

totaling $16,434 that was acquired for the Statewide Voter Registration System (SVRS) access. 

However, these computers are used primarily for daily operations, and are not restricted to 

HAVA related activities. A determination could not be made as to what portion of these costs is 

an appropriate use of HAVA funds. 

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The Uniform Administrative Requirements for Grants and Cooperative Agreements with State 

and Local Governments, 41 CFR § 105-71.132 (the “Common Rule”) states that: 

(c)(1)	 Equipment shall be used by the grantee or subgrantee in the program or project for 

which it was acquired as long as needed, whether or not the project or program 

continues to be supported by federal funds. When no longer needed for the 

original program or project, the equipment may be used in other activities currently 

or previously supported by a federal agency. 

EAC Guidelines on DeMinimis Uses of Equipment 

May HAVA funds be used to support deminimus uses of equipment by the state for nonHAVA related purposes? 

No. The state can allocate only that portion of the equipment purchase cost that will go to 

benefit the state’s HAVA program. Alternatively, the expenses may qualify as an indirect 

cost in which case the state may submit an indirect cost rate proposal in which it identifies 

and supplies information regarding direct and indirect costs of operation. 

Recommendation: 

5.	 We recommend that the EAC work with the state to determine the allowability of the 

equipment costs noted above. 

SOS Response: 

The SOS’ office responded that they understood the requirement that the HAVA funded 

equipment could only be used to benefit state’s HAVA program, and noted that they sent 

correspondence to the counties on December 19, 2006 and May 12, 2009 stating that the 

federally funded equipment was restricted in its use, and “...its non-HAVA use, even de minimis 

use, will not be allowed.” They further stated that, since the state had consistently advised 

counties as to the limitations of HAVA purchased equipment, they requested the state not be 

held accountable for the de minimus use contrary to direct instructions from their office. 

V. Unallowable Expenses 

On August 25, 2006, the Nevada SOS awarded a grant for $20,000 of HAVA Section 101 funds 

to be used to support National Women’s Suffrage Day (NWSD) activities in 2007. The funds 

were used for promoting the NWSD activities through paid advertising, and providing funds to 

youth theater groups for planned rehearsals and necessary stage props for performances of a 

play to tell the history of women’s struggles to get the right to vote. The grant application stated 

that the “target audiences are elementary school-age children and their parents residing in Clark 

County in July 2007.” Our review of the grant related activities concluded that, although there 

were some aspects of the NWSD program that encouraged parents to register to vote, many of 

the events and activities were directed at non-voting age children and did not meet the HAVA 

definition of educating voters on voting procedures, voting rights, and voting technology. 

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The proposed uses of the funds were for: 

•	 Advertising (Radio) $ 6,000 

•	 Travel 500 

•	 Administrative costs 1,000 

•	 Print materials 4,000 

•	 Other related costs (Note) 8,500
 

Total $20,000
 

Note: Contract with a teen theater group included a stipend for the adult coordinator. 

HAVA Section 101 funds can be used to improve the administration of elections. HAVA Section 

101(b)(1)(C) requires that: 

(b) USE OF PAYMENT.— 

(1) IN GENERAL.—A state shall use the funds provided under a payment made 

under this section to carry out one or more of the following activities: 

(C) Educating voters concerning voting procedures, voting rights, and 

voting technology. 

The EAC Funding Advisory Opinion (FAO) 08-005 states: 

The EAC has concluded that HAVA authorizes the use of HAVA funds for voter 

registration activities as follows: 

•	 Section 101(b)(1)(C) allows Section 101 funds to be used for educating voters 

concerning voting procedures. 

In the opinion of EAC, the phrases “educating voters on voting procedures” and “how to 

cast a vote” would include providing instruction on how to register to vote as one could 

not vote if not registered. However, voter registration activities do not qualify for funding 

under the umbrella of improvements to the administration of elections for Federal office 

because the activities do not directly contribute to the administration of a Federal 

election. 

Recommendation: 

6.	 We recommend that the EAC resolve the issue with the SOS whether the costs associated 

with NWSD, as set forth above, qualify for HAVA funding. 

SOS Response: 

The SOS’ office considers the costs an allowable expenditure of HAVA funds and provides their 

rationale in the response in Appendix A, citing various aspects of the program as justification, 

including the diverse audience to which it was directed. 

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Auditor’s Response: 

EAC has determined in FAQ-08-005 that the use of HAVA funds to educate non-voters and to 

increase voter turnout is not allowed under HAVA. 

VI. Unallowable Expenses 

The SOS used Section 101 HAVA funds totaling $25,000 for video segments that may not be 

allowable, since not all of the content of the programs was directed at voter education. Some of 

the videos were designed to encourage voter registration, which is allowable as determined by 

the EAC; however, the videos also included get out the vote messages. The programs ended 

with references to two websites labeled Silverstate08.com and RaiseYourVoice.org. 

HAVA Section 101 funds can be used to improve the administration of elections. HAVA Section 

101(b)(1)(C) requires that: 

(b) USE OF PAYMENT.— 

(1) IN GENERAL.—A state shall use the funds provided under a payment made 

under this section to carry out one or more of the following activities: 

(C) Educating voters concerning voting procedures, voting rights, and 

voting technology. 

The EAC Funding Advisory Opinion (FAO) 08-005 states: 

The EAC has concluded that HAVA authorizes the use of HAVA funds for voter 

registration activities as follows: 

•	 Section 101(b)(1)(C) allows Section 101 funds to be used for educating voters 

concerning voting procedures. 

In the opinion of EAC, the phrases “educating voters on voting procedures” and “how to 

cast a vote” would include providing instruction on how to register to vote as one could 

not vote if not registered. However, voter registration activities do not qualify for funding 

under the umbrella of improvements to the administration of elections for Federal office 

because the activities do not directly contribute to the administration of a Federal 

election. 

Recommendation: 

7.	 We recommend that the EAC resolve the issue with the SOS whether the costs associated 

with this grant, as set forth above, qualify for HAVA funding. 

SOS Response: 

The SOS’ office considers the costs an allowable expenditure of HAVA funds and provides their 

rationale in the response in Appendix A, citing the educational aspects of the websites to which 

the videos direct the viewer. 

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Auditor’s Response: 

We agree that the archived website we viewed offers educational material regarding voting that 

might be allowed by HAVA. However, the EAC has determined in FAQ-08-005 that the use of 

HAVA funds to increase voter turnout, which was the focus of the videos, is not allowed under 

HAVA, and we stand by our recommendation. 

**************************************** 

We provided a draft of our report to the appropriate individuals of the Nevada SOS and the 

Commission. We considered any comments received prior to finalizing this report. 

The EAC responded on September 8, 2011 and generally agreed with the report’s findings and 

recommendations. The EAC stated that they would work with the SOS to resolve the issues 

associated with voter education and ensure appropriate corrective action. The EAC’s complete 

response is included as Appendix A-2 



CG performed its work between January 10, 2011 and January 28, 2011. 

Calverton, Maryland 

May 3, 2011 

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ROSS MILLER 

Secretary of State 

NICOLE J. LAMBOLEY 

Chief Deputy Secretary of State 

ROBERT E. WALSH 

Deputy Secretary
 

for Southern Nevada
 

STATE OF NEVADA 

OFFICE OF THE
 

SECRETARY OF STATE
 

SCOTT W. ANDERSON 

Deputy Secretary
 

for Commercial Recordings
 

SCOTT F. GILLES 

Deputy Secretary for Elections 

KATE L. THOMAS 

Deputy Secretary 

for Operations 

The Attachments referred to in the response are not included in the report, but are 

available to the EAC upon request. 

August 29, 2011 

Curtis Crider 

Inspector General 

U.S. Election Assistance Commission 

1201 New York Ave, NW – Suite 300 

Washington, DC 20005 

Re: State of Nevada’s Response to NFRs 

Dear Mr. Crider: 

Thank you for your email dated July 22, 2011 regarding the Notification of Findings and 

Recommendations that were prepared by Clifton Gunderson for its audit of the State of Nevada’s 

use of HAVA funds. Please consider this letter the State’s response as prepared by the Nevada 

Secretary of State. For your convenience, a listing of Findings and justifications are noted 

below. 

NFR 1 - Personnel Certifications 

Upon the initial disbursement of the HAVA funding in 2003, the Nevada Secretary of State’s 

Office established a legislatively approved special revenue budget account known as the Election 

Fund under Nevada Revised Statute (“NRS”) 293.442. Federal election funds are deliberately 

held separately here are not commingled with general funds. Salaries for full-time HAVA staff, 

including the HAVA Administrator, and HAVA Program Officer, are paid solely out of this 

budget account. For a salary to be paid out of this account, only work performed for HAVA 

related activities can be performed. While Secretary of State HAVA staff was not aware of the 

technical OMB A-97 rule regarding the need for biannual personnel certifications, please be 

assured that full-time HAVA employees only performed HAVA related activities. 

NEVADA STATE CAPITOL COMMERCIAL RECORDINGS LAS VEGAS OFFICE RENO OFFICE 

101 N. Carson Street, SUITE 3 

Carson City, Nevada 89701-4786 

Telephone: (775) 684-5708 

Fax: (775) 684-5725 

MEYER’S ANNEX OFFICE 

202 N. Carson Street 

Carson City, Nevada 89701-4201 

Telephone: (775) 684-5708 

Fax: (775) 684-5725 

555 E. Washington Avenue Ste. 5200 

Las Vegas, Nevada 89101-1090 

SECURITIES 

Telephone: (702) 486-2440 

Fax: (702) 486-2452 

CORPORATIONS 

500 Damonte Ranch Pkwy, Suite 657-A 

Reno, Nevada 89521 

Telephone: (775) 687-9950 

Fax: (775) 853-7961 

Telephone: (702) 486-2880 

Fax: (702) 486-2888 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

Since notification of the missing certifications, the HAVA Administrator coordinated with the 

Secretary of State’s personnel technician to complete a certification for the last six months of 

2010, as well as the for the first six months of 2011. Future and reoccurring semi-annual 

certifications have been scheduled through the office’s internal Outlook calendar system. If the 

Inspector General, or the EAC, has further corrective action to ensure the completion of semiannual certifications, the Secretary of State’s Office is open to suggestions. 

NFR 2 – Property Records 

County property records that were not formatted to capture the required Common Rule 

information have since been amended. Following the Recommendation in NFR 2, these records 

will be distributed to county staff who will conduct a physical inventory of all HAVA funded 

equipment in their possession, sign a Secretary of State acknowledgement regarding the accuracy 

of the list, date it, and provide these results for the State to use to update the statewide master 

inventory list. 

NFR 3 – Interest Earnings 

After a review of the timing of deposits by the previous administration of initial HAVA 101 

funds and notification to the Treasurer’s Office of the eligibility of these funds to earn interest, a 

letter had been sent to the Treasurer’s Office asking that correct deposits be made to the HAVA 

account, including the compounding interest, for two months worth of interest in May and June 

of 2003. 

UPDATE - The Treasurer’s Office has deposited the amount owed to the HAVA account, 

depositing $20,838.37 into the account. This amount includes interest owed to the election 

account for the period from May 1, 2003 through June 30, 2003, plus the additional compounded 

interest as of June 30, 2003, and any additional compounded interest owed through the date of 

the transfer. Please see Attachment “A” as verification of the transfer. 

NFR 4 – Property/Usage 

The Secretary of State’s Office understands that the State can allocate only that portion of the 

equipment purchase costs that will go to benefit the State's HAVA program. Both the prior 

administration, and this administration, has consistently advised the counties that were recipients 

of HAVA purchased equipment that those purchases were for federal election purposes only. In 

an email dated December 19, 2006, concerning this very SVRS equipment noted in the Finding, 

HAVA Administrator Raji Rai-Nielsen wrote to clerks, including Carson City, "For the time 

being, as long as you are using the left over inventory ONLY for election related purposes, you 

can continue to use it" (emphasis in original). Then again, in a faxed letter dated May 12, 2009, 

Deputy for Elections Matt Griffin provided counties three options for replacement of equipment, 

highlighting that "the Secretary of State's office will still purchase equipment for federal election 

use with the State paying 100% of the cost for equipment that is used 100% of the time for 

federal elections. The equipment purchased under this arrangement will require a signed 

acknowledgement from your office as to the limitations of use for this type of equipment. Under 

this type of purchasing, non-HAVA use, even de minimis use, will not be allowed." Both 

correspondences are included as Attachment “B” to this letter. Since the State has consistently 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

advised the counties as to the limitations of HAVA purchased equipment, it should not be held 

responsible for de minimis use contrary to direct instructions from this office. The Secretary of 

State’s Office welcomes the opportunity to work with the EAC to determine the allowability of 

the equipment costs noted above. 

NFR 5 – Sub-grant – Woman’s Suffrage Day 

The Secretary of State’s Office, upon recommendation from the Advisory Committee on 

Participatory Democracy, which was authorized to recommend grant awards pursuant to HAVA 

eligible activities, provided a $20,000 grant in 2006 to the League of Women Voters (“LWV”) 

Women’s Suffrage Program, which focused its activities on a broad and diverse audience. This 

broad and diverse audience has resulted in a finding during this audit based on ages of some of 

the audience. Because Women’s Suffrage has a wide demographic reach, this program is 

distinguishable to other HAVA activities found to be unrelated to voter education based on their 

direct and singular focus on non-voting age recipients. For instance, HAVA funds targeting nonvoting age audiences through coloring books can be distinguished from our program in that a 

coloring book audience is obviously a child audience; whereas the Women’s Suffrage program 

was targeted to audiences of all ages, including P-17 (pre-18 year olds) and voting age 

individuals. Please note the message on the poster as Attachment “C,” “Show your kids the 

Importance of Voting. They Will be More Likely to Vote as Adults” as an example that this 

program targeted voting age audiences. Also, unlike the singular audience of a coloring book 

program, highlighting Women’s Suffrage to educate voters on constitutional voting rights cannot 

be limited to an age group because Women’s Suffrage impacts all voter demographics. 

Educating voters concerning voting procedures, voting rights and voting technology are 

expressly stated allowable Section 101 expenses. This program provided fundamental education 

to a specific voting right, the Nineteenth Amendment to the U.S. Constitution. As such, the 

Secretary of State’s Office believes this program was an allowable expense. The expenses of this 

program should not be questioned if elementary school age children – who were not the sole 

target - benefited as being part of a larger mixed and indiscriminate audience. The Secretary of 

State’s Office will provide any further material upon request to defend its position and help 

resolve with the EAC that these costs were allowable. 

NFR 6 – Sub-grant – College of Southern Nevada Foundation 

The College of Southern Nevada used Section 101 funds to produce 6 videos (1. Voting is Your 

Right, 2. Voting Isn’t Hard, 3. Vote Early, 4. ESL (in English), 5. Absentee Ballots, 6. ESL (in 

Spanish)) concentrating on, and educating voters about, voting procedures, voting rights, and 

voting technology. While each video concludes with the phrase “This November Raise Your 

Voice, Get Out and Vote,” these videos are more than your typical prohibited Get Out the Vote 

(“GOTV”) messages. 

Video 1, Voting is Your Right, emphasizes qualifications for registering to vote, 

including citizenship and age requirements, and the need to register before voting. Pursuant to 

EAC FAO 08-005, Section 101 funds may be used at any time to instruct individuals on how to 

register to vote. This would include print, radio, and television advertisements informing 

individuals about the need to register to cast a vote, where to register to vote, how to obtain 
 

 

 

 

 

 

 

 

 

 

 

registration forms, and how to complete the forms (emphasis added). Since this video instructs 

individuals about the requirement to register to vote before being able to cast a ballot and vote as 

noted in FAO 08-005, it cannot be characterized as just a GOTV message, and should be an 

allowable expense. 

Video 2, Voting Isn’t Hard, educates voters about Nevada’s DRE voting 

technology and how you operate a touchscreen voting machine. Instructing viewers as to voting 

technology educates beyond a simple GOTV message. As such, this video should also be 

considered an allowable Section 101 expense. 

Videos 3 and 5 educate viewers on Early Voting and Absentee Voting, two voting 

procedures in Nevada. The Early Voting video provides specific dates for early voting, as well 

as the requirement to be registered before voting. The Absentee Video also emphasizes early 

voting, as well as educates viewers that to request an absent ballot, they just need to contact their 

local election official. References to two websites are provided at the end of the video for more 

information. One of the websites, silverstate08.com, not only has a link to a listing of local 

election official contact information for which a viewer could use to request an absent ballot, but 

a link to the actual absent ballot request form. The wealth of early and absentee voting 

procedure information provided in these two videos should justify an allowable Section 101 

expense and not be considered just a GOTV message. 

Videos 4 and 6 educate voters with limited English language proficiency as to 

understanding the voting process in Nevada by requesting a sample ballot in either English or 

Spanish print. Providing assistance to Native Americans, Alaska Native citizens, and to 

individuals with limited proficiency in the English language is an expressly allowable use of 

Section 101 funds. Furthermore, Section 302 voting information requirements define a sample 

version of the ballot that will be used for that election as component of voting information. As 

such, educating voters to request a sample ballot in either English or Spanish so that they may 

learn about voting procedures, voting rights, and voting technology goes beyond just a GOTV 

message. Therefore, this video, too, should be an allowable expense. 

Each of these videos concludes with references to visit raiseyourvoice.org and 

silverstate08.com for more information. While not currently active as a URL, a 

silverstate08.com link has been archived on the Secretary of State’s website, and may be found 

at http://www.nvsos.gov/silverstate008gen/. It should be noted that in addition to 

raiseyourvoice.org, silverstate08.com was an active link at the time of this grant during the 2008 

election cycle. Silverstate08.com not only provides election results (which is an acceptable 

component and expenditure of a HAVA voting system pursuant to 301(b)(1)(c)), but the site also 

provides links to voting procedures (early voting times and locations, absent ballot procedures 

and forms, and Election Day voting), voting rights (Voter’s Bill of Rights), and voting 

technology (Voting Machine Demo video). By concluding each voting procedure video with 

references to more information at silverstate08.com, these videos educate voters in-depth as to 

voting procedures, voting rights, and voting technology. 

For all the aforementioned reasons, the Secretary of State’s Office believes that this 

subgrant, and the videos produced therein, are allowable expenses as illustrated in FAO 08-005. 
 

 

 

 

 

 

 

 

 

EAC RESPONSE TO THE DRAFT AUDIT: 

OIG Performance Audit Report on the Administration of 

Payments Received Under the Help America Vote Act by the 

State of Nevada, for the Period April 30, 2003 Through 

December 31, 2010. 

September 8, 2011 

MEMORANDUM 

To: Curtis W. Crider 

Inspector General 

From: Thomas R. Wilkey 

Executive Director 

Subject: Draft Performance Audit Report – “Administration of Payments 

Received Under the Help America Vote Act by the State of 

Nevada”. 

Thank you for this opportunity to review and respond to the draft audit report for 

Nevada. 

The Election Assistance Commission (EAC) generally concurs with the results of 

the review and recommendations. The EAC will work with the Nevada Secretary 

of State (SOS) to resolve the issues associated with voter education and ensure 

appropriate corrective action. 
 

 

 

 

 

 

 

 

Appendix B 

AUDIT METHODOLOGY 

Our audit methodology included: 

•	 Assessing audit risk and significance within the context of the audit objectives. 

•	 Obtaining an understanding of internal control that is significant to the administration of the 

HAVA funds and of relevant information systems controls as applicable. 

•	 Identifying sources of evidence and the amount and type of evidence required. 

•	 Determining whether other auditors have conducted, or are conducting, audits of the 

program that could be relevant to the audit objectives. 

To implement our audit methodology, below are some of the audit procedures we performed: 

•	 Interviewed appropriate SOS employees about the organization and operations of the HAVA 

program. 

•	 Reviewed prior single audit report and other reviews related to the state’s financial 

management systems and the HAVA program for the last 2 years. 

•	 Reviewed policies, procedures and regulations for the SOS’s management and accounting 

systems as they relate to the administration of HAVA programs. 

•	 Analyzed the inventory lists of equipment purchased with HAVA funds. 

•	 Tested major purchases and supporting documentation. 

•	 Tested randomly sampled payments made with the HAVA funds. 

•	 Verified support for reimbursements to local governments (counties, cities, and 

municipalities). 

•	 Reviewed certain state laws that impacted the election fund. 

•	 Examined appropriations and expenditure reports for state funds used to meet the five 

percent matching requirement for section 251 requirements payments. 

•	 Evaluated compliance with the requirements for accumulating financial information reported 

to the Commission on the financial status reports, Form SF-269 and 425, accounting for 

property, purchasing HAVA related goods and services, and accounting for salaries. 

•	 Verified the establishment and maintenance of an election fund. 

•	 Conducted site visits of selected counties to observe physical security/safeguard of 

equipment purchased with HAVA funds and to test for proper accounting and 

documentation. 

17
 
 

Appendix C 

MONETARY IMPACT AS OF DECEMBER 31, 2010
 

Description 

Semi-annual certifications of full-time 

employment on HAVA activities not filed 

Questioned 

Costs 

$744,824 

Additional Funds for 

Program 

$0 

Interest earnings not transferred to 

HAVA election account $20,838 

Non-HAVA related use of SVRS 

computer equipment $16,434 

National Women’s Suffrage Day $20,000 

Video promotional program $25,000 $0 

Totals $806,258 $20,838 

18
 
 

 

 

OIG’s Mission 

The OIG audit mission is to provide timely, high-quality 

professional products and services that are useful to OIG’s clients. 

OIG seeks to provide value through its work, which is designed to 

enhance the economy, efficiency, and effectiveness in EAC 

operations so they work better and cost less in the context of 

today's declining resources. OIG also seeks to detect and prevent 

fraud, waste, abuse, and mismanagement in these programs and 

operations. Products and services include traditional financial and 

performance audits, contract and grant audits, information systems 

audits, and evaluations. 

Obtaining 

Copies of 

OIG Reports 

Copies of OIG reports can be requested by e-mail. 

(eacoig@eac.gov). 

Mail orders should be sent to: 

U.S. Election Assistance Commission 

Office of Inspector General 

1201 New York Ave. NW - Suite 300 

Washington, DC 20005 

To order by phone: Voice: (202) 566-3100 

Fax: (202) 566-0957 

To Report Fraud, 

Waste and Abuse 

Involving the U.S. 

Election Assistance 

Commission or Help 

America Vote Act 

Funds 

By Mail: U.S. Election Assistance Commission 

Office of Inspector General 

 1201 New York Ave. NW - Suite 300 

 Washington, DC 20005 

E-mail: eacoig@eac.gov 

OIG Hotline: 866-552-0004 (toll free) 

FAX: 202-566-0957