June 26, 2012

Christopher Morse
Senior Campaign Finance Analyst
Federal Election Commission
999 E Street NW
Washington D.C. 20463

Re:	Committee ID C00309567
      Your May 24, 2012 request for information

Dear Mr. Morse: 

This is to provide additional information, as requested in
your letter, regarding amended reports filed by the
Committee. We address first the issue of disbursements,
which is the largest type of correction in the cited
amendments, and then the categories of receipts and debts.
Analysis Tables are being sent under separate cover in
accordance with your instruction.

Disbursements ? Petty Cash:

As we disclosed in our letter of October 14, 2011, our
internal audit found errors in the booking of disbursements.
The majority of those errors resulted from the Committee?s
initial petty cash management procedures.

Petty cash funds were maintained in a number of cities where
the Committee was active in order to cover field organizing
activities (mainly public transport and automobile gas
reimbursements and office supplies). The original procedure
for booking and reporting petty cash activity was to record
replenishments of those funds as internal transfers between
cash accounts (from bank to petty cash fund) and to record
each disbursement out of funds as a separate expenditure.
Data for this second step was provided to the Committee?s
central bookkeeping staff in the form of raw purchase
receipts and disbursement logs.

Some of the fund administrators did not submit their receipts
and logs in a timely fashion and the Committee did not have
adequate mechanisms in place for monitoring balances and
detecting anomalies?e.g., a book balance in excess of the
auditable cash remaining. The expenditure by expenditure
approach to bookkeeping also meant that central bookkeeping
staff time was consumed in recording raw receipts rather than
auditing the petty cash funds themselves. When logs and vendor
receipts were subsequently obtained and the data input, the
additional disbursements were booked and the Committees?
overall cash balance reduced accordingly. 

The new procedures that were implemented to replace the former
cumbersome method were first to replace the bookkeeping
methodology with the more standard petty cash procedure
recommended by the FEC, posting transfers into petty cash
funds simply as ?replenishment of petty cash?, and reporting
these disbursements in the Committee?s disclosure reports,
rather than attempting to post and report each individual
disbursement out of petty cash.

Second, for both record-keeping and audit purposes, the
previous petty cash logs maintained by fund administrators
were replaced with a journal based on a standardized
spreadsheet, in which are recorded transfers into the fund
and disbursements out of it (keyed to files of the vendor
receipts), with an automatically calculated running balance.
On a regular basis, both the updated spreadsheets and the
underlying receipt documentation are sent by the fund managers
to central Committee staff, who review the activity and the
documentation, and communicate immediately with any fund
manager where corrective action is needed. The new methodology
has eliminated the problem of tardy documentation from fund
administrators and allowed central bookkeeping staff to
effectively audit and monitor weekly disbursements to these
accounts.

As previously acknowledged, while the Committee implemented
more rigorous controls and corrected its records accordingly,
it erred in not amending the affected FEC reports in a more
timely fashion.

Disbursements - Vendor Invoices:

In addition to the petty cash error, a small number of vendor
invoices were miscoded when first posted, totaling approximately
$16,400. In the Committee?s reporting system, data contained in
the invoice determine on what report line a disbursement will be
reported. If that data field of an invoice is left blank,
payments against that invoice are not reported. In addition to
correcting the invoices where that field had been mistakenly left
blank, the Committee implemented procedures to ensure that
invoices would be properly coded thereafter, and created a user
manual for the responsible staff.

These two types of error account for all but approximately $3,000
of the total amended disbursements of $54,894, nearly all of
which occurred in 2005-2006. In those years in which the error
largely occurred, the amount of expenditure added in the amended
disclosure reports, compared to the previously filed reports,
constitutes a very small increase in each year (0.52% in 2005 and
0.73% in 2006). For the entire period of the amended reports, the
total of additional disbursements is only 0.22% of the total
$24,485,094 in disbursements in the cited report lines. Tables 1
and 2 show corrected amounts for the additional activity reported
in the amendments. The table attached to your letter mistakenly
omitted those amended reports in which disbursement amounts
decreased, in computing the total additional for the period.

Receipts - Contributions:

The total of additional receipts reported in the Committee?s
amendments was $11,210 out of total receipts for the period of
$24,590,203 (0.05%). What appear as additional receipts in the
tables attached to your letter, beyond that amount, are for the
most part increases in Itemized Contributions, which were offset
by corresponding decreases in Unitemized Contributions (and
vice-versa). The offsetting decreases are not included in those
tables, which therefore produce an inflated total of ?additional
receipts.? See Tables 3 and 4.

These changes from the original to the amended reports always
resulted from database updates made subsequent to the original
filings, mainly consolidation of duplicate name entries, and
possibly some reattributions. The Committee has a procedure in
place to review its database for possible name duplicates, and to
merge these where confirmed. In cases where a merge caused the
contributor to exceed the $200 reporting threshold, where one or
both un-merged records previously did not, a new report would
itemize that person?s contributions on Line 11(a)(i), where
previously they would have appeared as Unitemized Contributions
on Line 11(a)(ii). Table 4 demonstrates that nearly every
amendment?s increase in one or the other of these sub-lines, is
offset by an exactly equal decrease in the other. The component
of actual additional receipts represented by individual
contributions is thus $561 over the period, as opposed to the
$22,321 it would appear to be, if the offsetting decreases are not
taken into account.

Receipts ? Other Components:

Of the remaining additional receipts in the amended reports,
$4,500 represents sublet rental receipts (Line 17, ?Other
Receipts?), that the Committee failed to report in its July and
October 2010 quarterly reports, due to a coding error similar to
that described for vendor invoices. These payments were not from
a prohibited source.

The final component of amended Receipts is vendor refunds (for
return of goods, return of deposits, corrections of misbillings,
and the like), reported as Offsets on Line 15, for a total of
$6,304 over the period. These had not appeared in the Committee?s
original reports, again because of coding errors, subsequently
corrected. Although these transactions should, of course, have been
reported in the first instance, and it was the Committee?s error
not to, the amount is very small relative to the Committee?s total
Receipts. Further, it should be noted that this type of transaction
does not, in fact, represent an increase in activity. On the
contrary, as refunds to the Committee of previously issued payments,
these actually represent decrease in activity, insofar at the
activity originally reported (the expenditure) has been cancelled.
For purposes of gauging ?increased activity,? this amount should
therefore not be added to the increase in receipts, but rather
subtracted from the reported increase in disbursements. See Tables
5(a), (b), and (c).

Debts:

We first explain why some of the Committee?s amended reports showed
more debt than the previous versions, and then address the relative
significance of those increases.

Nearly all of the reported additional debt arose from the Committee?s
receipt of vendor invoices subsequent to the filing of the disclosure
reports in question. A majority of the invoices that were not
received by central bookkeeping in time for reporting were requests
for reimbursement from individuals, or invoices from vendors that
were engaged by committee organizers (e.g., cell phones).

Since these were booked as of the vendor?s date, rather than date of
receipt, they therefore appeared as debts in the amended, but not the
original, reports. It would be surprising if this did not occur with
most active committees ? a result that will rarely appear if the
debts (as is typical) are paid in the next reporting period, and the
period in which they were incurred is never amended. Since the cause
of the additional reported debt is late receipt of invoices by the
Committee with respect to its reporting deadlines, the amended reports
that show such increases, as one would expect, are predominantly those
with shorter preparation times: quarterly and shorter
(election-period) reports, with two weeks or less to prepare reports,
vs. Mid-Year and Year-End reports, with a month between the close of
books and the report date. Thus, of the 16 reports cited in your
letter with increased debts, 11 are reports with short preparation
times (out of 13 such reports in the entire period), and only 5 are
Mid-Year or Year-End reports (out of 11 in the period).

Regarding the significance of the alleged increases, it is important
to note that debt represents a fundamentally different type of
financial disclosure than receipts and disbursements. Whereas the
additional receipts or expenditures disclosed in amended reports can,
perhaps, be meaningfully summed across multiple periods (putting aside
the issue of whether the resulting total is significant), increases in
debt, by their nature, cannot be summed in a meaningful way at all.

This is because, first, if a debt is not paid in the subsequent
reporting period, it will continue to be reported as a debt for that
subsequent period ? and any further periods in which it remains unpaid
? without any additional activity having occurred. By the methodology
used in the attachment to your letter, such debts, of which there are
several, are double-counted, or more.

More importantly, for those debts that did not carry forward in this
manner, but were paid in the subsequent period, the underlying activity
was fully reported in the Disbursement sections of the Committee?s
reports. It is thus misleading to call the additional debt in the
amended reports, an increase in ?activity? (comparable to actual
increases represented by additional reported disbursements), because the
?activity? as such ? the purchase of goods or services ? was fully
reported in the disbursements sections of the Committee?s reports, that
is, for each reporting period following the period in which the debts
were incurred. Indeed, such disbursements had all, or nearly all, been
reported even in the Committee?s pre-amendment reports. The only
difference between the amended and unamended reports, therefore, is that
the activity represented by those transactions, previously reported only
as disbursements, was, in the amended reports, shown twice, once as an
incurred debt, and secondly as the disbursement.

Conclusion:

Two points should be noted regarding all three areas (Disbursements,
Receipts, Debts):

First, the reported increases are very small, both in absolute terms,
and with respect to the Committee?s total activity, as shown in
Table 5(c). Increased Receipts are only $4,906 out of a total of
$24,583,900, an increase of 0.02%. The increase in reported
Disbursements is only 0.2%. For debts, based on 27 reporting quarters
in the period analyzed, the increases only average about $1,830
per quarter. With an average in Line 21 disbursements of $906,855 per
quarter, this represents only 0.2% of activity (and, as noted, even the
reports as first filed, had disclosed that activity in the form of the
disbursements paying the debts).

Second, none of the increases represent either Contributions to Candidates
or Committees, or Independent Expenditures, but as noted, are primarily
for such activities as local travel reimbursement, office supplies,
routine telephone use, and other administrative expenses. Further, they do
not correspond in any way with election periods. The Committee regrets the
errors found in its internal audit as reported above.?The Committee
believes, however, that it has put measures in place internally so that
these errors will not be repeated.?The Committee does note that these
errors occurred in the area of operating expenses rather than expenses
directly impacting electoral activities and are small when compared to the
scope of the Committee's overall activities.

We hope that this response satisfactorily explains anything that was
unclear in our amendments and previous notice, and that it resolves any
remaining questions. The supplementary tables, sent under separate cover,
provide summary and source-detail documentation for the major points,
including, where appropriate, the corrections previously cited regarding
the tables attached to your letter.

Sincerely yours,
Barbara Boyd
Treasurer