Source: https://ethics.wi.gov/Pages/Enforcement/Audits.aspx
Timestamp: 2019-05-26 23:20:49
Document Index: 761015875

Matched Legal Cases: ['§ 19', '§ 19', '§ 19', '§ 978', '§ 19', '§ 13']

Ethics Audits Conducted By The Ethics Commission
Ethics > Audits Conducted By The Ethics Commission
Audits Conducted By The Ethics Commission
Campaign Finance Audits
The Commission is required to audit campaign finance reports to check for violations under WIS. STAT. § 19.49(2g). The statute requires making note of the possible violation, and informing the committee of the issue, but does not detail procedures for resolving the possible violations. The Ethics Commission has adopted the campaign finance audit schedule provided below.
The Commission is required to audit campaign finance reports to check for violations under Wis. Stat. § 19.49(2g). The statute requires making note of the possible violation, and informing the committee of the issue, but does not detail procedures for resolving the possible violations.
(2g) AUDITING. In addition to the facial examination of reports and statements required under s. 11.1304 (9), the commission shall conduct an audit of reports and statements which are required to be filed with it to determine whether violations of ch. 11 have occurred. The commission may examine records relating to matters required to be treated in such reports and statements. The commission shall make official note in the file of a committee, as defined in s. 11.0101 (6), of any error or other discrepancy which the commission discovers and shall inform the person submitting the report or statement. The board [commission] may not audit reports, statements, or records beyond the 3−year period for which a committee must retain records under ch. 11.
Restrictions on Release of Records
The Commission is prohibited under Wis. Stat. § 19.50(1) from releasing or allowing inspection of certain records including, information related to an investigation or prosecution under Ch. 11, subch. III of Ch. 13, or subch. III of Ch. 19 or any other law specified in Wis. Stat. § 978.05(1) or (2). Under Wis. Stat. § 19.55(3), records not subject to inspection include anything obtained or prepared by the Commission in connection with an investigation, including the full text of any complaint received by the Commission. While audits are separated from the confidentiality provisions that specifically apply to complaints, they still may result in an investigation or prosecution, so past practice of the staff has been to release only very general information, such as the number of possible violations identified in an audit. Information identifying a committee, individual, violation, or settlement amount was released only if contained within a signed settlement agreement.
Overview of Audit Procedures
1.Staff will initiate an audit based on the schedule listed below. Some audits, like timely filing of campaign finance reports or payment of filing fees, will occur shortly after a report or payment is due. Others require more data analysis, and will occur as time permits.
2.When conducting an audit, staff will perform a global analysis of all committees or individuals subject to a particular law – for example, all committees required to report cash balances will be audited for cash balance discrepancies, and all candidates on the ballot during the previous election cycle will be audited for contribution limits violations.
3.Most data will be pulled from the CFIS database. For lobbying audits, data is also pulled from the Eye on Lobbying website, and for audits of contribution limit violations, staff will pull a list of candidates on the ballot in a specific election from WisVote.
4.Audit data and documents for each committee or person contacted will be saved on the Ethics Commission's internal SharePoint site.
5.When possible violations are identified, staff will send out an initial communication to the committee or individual with a request to respond within 30 days. The initial communication will identify the issue and request that it be fixed, or that the committee or person admit that the violation occurred. The initial communication may reference the Ethic's Commission standard settlement schedules and settlement amounts but will not include settlement agreements.
6.On an ongoing basis, staff will work with committees to correct erroneous reports. If a mistake is corrected, staff will close the audit for that committee or person.
7.Committees and persons admitting that a violation occurred will be added to the agenda for the next Commission meeting. Committees that wish to appear before the Commission through a written submission, by phone, or in person will be added to the agenda for the next Commission meeting.
8.Once 30 days have passed since the initial communication:
If the committee or person has not responded, staff will send a second communication with a reminder of the issue.
Staff will add the audit item to the audit database for tracking.
Staff will add the item to the agenda of the next Commission meeting to ask the Commission to issue a settlement agreement for the amount specified in the standard settlement schedule.
9.The Commission, at its next meeting, may direct staff to issue a settlement agreement or close the audit as appropriate for each committee or person. If the Commission has not already considered their case, the committee or person may request to appear before the Commission. Once a settlement offer is issued, the committee or person shall have 30 days to pay the settlement offer and sign the settlement agreement.
10.If the registrant or individual refuses to accept the Commission's settlement offer or does not respond, the Commission may direct staff counsel to commence a civil action to collect a forfeiture of at least the amount of the settlement offer.
11.The Commission may place some registrants on administrative suspension rather than pursue civil action. This will generally apply to registrants with little activity that cannot be contacted. When staff believes a registrant should be placed on administrative suspension, staff will present the situation for the Commission's approval. If a registrant on administrative suspension wishes to become active again, staff will seek all incurred penalties and all reports, and may request the Commission to initiate a civil action if the registrant does not comply.
12.Commission staff will inform the Commission of all late reports, settlement offers, paid settlements and administrative suspensions, and will compile an annual summary for each calendar year.
Period: Up to three years from the date of the most recent election in which the committee participated through Termination
Termination audits cover a number of issues, such as whether the committee has $0 cash on hand, and $0 in outstanding debts and loans, if there is an outstanding filing fee, whether there are cash balance discrepancies, and other issues. These audits are conducted on an ongoing basis as committees request to terminate. If time and other work priorities permit, staff will contact unsuccessful candidates and advise them of their options regarding continued reporting, exemption, and termination. Committees identified through this audit could be subject to any of the applicable sections of the Campaign Finance Settlement Schedule.
Campaign Finance Filing Fees
Annual filing fees are due the same date the January Continuing campaign finance report is due, between the 15th and 17th of January. Notices are sent by email approximately one month before the fee is due, and reminder emails are sent one week and one day before the deadline. Committees that have not paid are contacted within a few days of the deadline. Committees identified through this audit could be subject to section three of the Campaign Finance Settlement Schedule (Late Payment of Annual Filing Fees).
Timely Filing of Campaign Finance Reports
Period: Each Required Campaign Finance Report
Start Date: Each Filing Deadline
Notices to file campaign finance reports are sent by email approximately one month before the report is due, and reminder emails are sent one week and one day before the deadline. Committees that have not filed are contacted the day after the deadline (for election related reports) or within a few days of the deadline (for continuing reports). Committees identified through this audit could be subject to section one or two of the Campaign Finance Settlement Schedule (Late Filing of Continuing Campaign Finance Reports / Late Filing of Pre-Primary, Pre-Election, and special Post-Election Reports).
Pending Transactions Audit
Committees have the ability to save transactions in the CFIS website, and file them all together when a continuing report or election related report is due. If a committee saves a transaction but does not file it, it is visible to staff, but not visible on the official report available to the general public. Staff generally does an audit of pending transactions as soon as all reports are officially filed in the CFIS database, since unfiled transactions may impact all of the other audit results. Committees are given 30 days to respond to the initial staff contact and file the pending transactions, or delete them if they are duplicates. Committees identified through this audit could be subject to section six of the Campaign Finance Settlement Schedule (Cash Balance Discrepancies).
Cash Balance Audit
If a committee has a discrepancy of $100 or more within a report, or between the ending balance and beginning balance of subsequent reports, staff will contact the committee and ask for a resolution within 30 days. Committees identified through this audit could be subject to section six of the Campaign Finance Settlement Schedule (Cash Balance Discrepancies).
Corporate/Union/COOP Contribution Audit
Period: Semiannually
Start Date: March and September, following each continuing report
Once a year, staff audits CFIS for contributions to candidates, party committees, legislative campaign committees, or PACs from businesses to check for unlawful corporate contributions. We also audit for contributions labeled as coming from individuals containing business identifiers like "Corp," "Inc," or "LLC." Committees that appear to have received unlawful contributions are contacted and asked to respond within 30 days. Committees identified through this audit could be subject to section eight of the Campaign Finance Settlement Schedule (Prohibited Corporate Contributions).
Lobbyist Contribution Audit
Once a year, staff compares a list of campaign contributions to partisan candidates with a list of registered lobbyists. If any matches are found, staff checks to see if the contribution was given before the lobbyist registered or after they surrendered their license. Staff also checks for returned contributions and attempts to eliminate false matches based on people with the same name from different cities. Lobbyists who appear to have made unlawful contributions are contacted and asked to respond within 30 days. Committees identified through this audit could be subject to section nine of the Campaign Finance Settlement Schedule (Prohibited Lobbyist Contributions).
Name/Address/Occupation Information Audit
Start Date: April and October following each continuing report
The new law effective January 1, 2016 requires committees collecting non-anonymous contributions of any amount report the name and address of the contributor. Committees must also report the occupation of any contributor giving more than $200 in a calendar year. In order to allow time for committees to become familiar with current requirements, 2018 will be the first time staff will conduct this audit since the new campaign finance laws were enacted. Staff will audit for individual contributions missing the required information, and contact committees where there are five or more incomplete contributions in a six-month period and those incomplete transactions account for five percent or more of the reported transactions. Committees identified through this audit could be subject to section five of the Campaign Finance Settlement Schedule (Incomplete Contribution Information)
Contribution Limits Audit – Spring/Fall
Period: Annually/Biannually
Start Date: Following April after April Election/August after November Election
The campaign period for spring candidates (judges) runs until July 31. Therefore, the final report of the campaign period is the January Continuing Report of the following year. The campaign period for fall candidates runs until the first Tuesday in January. Therefore, the final report of the campaign period is July Continuing Report of the following year.
After all reports from those periods are entered, and annual audits have been started, staff audit the campaign period for each office for violations of the contribution limits by individuals or committees. Staff conducts an annual audit of the $12,000 annual contribution limit to parties and segregated funds at the same time as the audit of the spring election cycle from the previous year.
Independent Expenditure Reporting/72 Hour Reporting Audit
Period: Annual or Semiannual
Start Date: September after April Elections and May after November Elections
For spring elections, after the July report is filed, the 72-hour reporting by candidates and parties can be compared to the committees' regular reports. For fall elections, this would be possible after the January report is filed. Staff will examine transactions occurring within 60 days of a primary or election. This may involve collecting information from TV stations, radio stations, and newspapers, and comparing that spending to the reports from registered committees and reports from unregistered IEs of over $2,500 in expenses. Any violations would be subject to section four of the Campaign Finance Settlement Schedule.
The Commission is required to audit lobbying reports to check for violations under WIS. STAT. § 13.74. The statute requires making note of the possible violation, and informing the person submitting the report of the issue, but does not detail procedures for resolving the possible violations. The Ethics Commission has adopted the lobbying audit schedule provided below.
Late Statements of Lobbying Activities and Expenditures (SLAEs) Audit
Staff conducts an audit to ascertain which principals do not meet the deadline.
Period: Each Required Statement of Lobbying Activities and Expenditures Report
Late 15-Day Reporting Audit
The Commission does not have the available resources to conducts audits of each lobbying principal and lobbyist's internal records. Staff audits for 15-day reports submitted after an SLAE deadline, which can be determined with certainty as being late. The Commission would also investigate any formal complaints related to late reporting.
"Hours, No Dollars" Audit
After every SLAE filing period, staff discovers a small handful of principals who report a certain number of hours spent on lobbying, but do not report a corresponding dollar amount of lobbying-related expenditures. Sometimes this is due to human error on the part of the filer; sometimes a lobbyist has agreed to do some work pro bono; sometimes there is another explanation. Commission IT assists in finding this small group after every SLAE deadline for staff to informally investigate.
Limited Lobbying Audit
Period: Each Calendar Year
Start Date: Following each January filing deadline
Typically, between 10 and 20 organizations pay a $20 fee to register with the Commission each legislative session as limited lobbying principals, meaning that they intend to spend less than $500 in a calendar year on lobbying-related activities. Such groups anticipate having only an exceptionally minimal lobbying presence in Wisconsin. After the July – December reports are filed each year, staff examine the two reports of the previous year for each limited lobbying principal to ensure that the $500 limit was not exceeded. In the event that a limited lobbying principal spends more than $500 in a calendar year on lobbying-related activities, they are required to complete full lobbying registration and pay the appropriate fees.