Sen Mae Beavers Final Audit Report 08-13-2008

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TENNESSEE REGISTRY OF ELECTION FINANCE Campaign Finance Audit of Senator Mae Beavers Election Year 2006 Audit Team: Jay Moeck, CPA, CFE Audit Manager Tabitha Peden, CFE Senior Auditor STATE OF TENNESSEE REGISTRY OF ELECTION FINANCE 404 JAMES ROBERTSON PARKWAY, SUITE 1614 NASHVILLE, TN 37243-1360 [phone] Fax: [phone] BOARD MEMBERS EXECUTIVE DIRECTOR William F. Long, Jr., Nashville, Chairperson Drew Rawlins Wade Hinton, Chattanooga, Secretary George Harding, Lebanon AUDIT MANAGER Patricia Heim, Nashville Jay Moeck, CPA, CFE Darlene McNeece, Loudon Lee Anne Murray, Nashville Aug 6, 2008 Members of the Registry of Election Finance 404 James Robertson Parkway, Suite 1614 Nashville, TN 37243-1360 Ladies and Gentlemen, Transmitted herewith are the agreed upon procedures for the campaign finance audit of Senator Mae Beavers’ 2006 election campaign for the Senate. This audit was conducted pursuant to the requirements of T.C.A. §2-10-212. The procedures were developed to aid the Registry of Election Finance in its responsibilities to monitor and enforce Tennessee’s Campaign Financial Disclosure Law and Campaign Contribution Limits Law. The candidate is responsible for complying with campaign finance laws and the accuracy of campaign financial ...

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• Publié par: Uffe
• Nombre de lectures: 27
• Langue: English

Extrait

 

 

                                                     

 

 

  T ENNESSEE R EGISTRY OF E LECTION F INANCE  

Campaign Finance Audit of Senator Mae Beavers Election Year 2006

 

  Audit Team:   Jay Moeck, CPA, CFE Audit Manager   Tabitha Peden, CFE Senior Auditor

STATE OF TENNESSEE

REGISTRY OF ELECTION FINANCE 404 JAMES ROBERTSON PARKWAY, SUITE 1614 NASHVILLE, TN 37243-1360     [phone]     Fax: [phone] EXECUTIVE DIRECTOR BOARD MEMBERS   William F. Long, Jr., Nashville, Chairperson Drew Rawlins Wade Hinton, Chattanooga, Secretary George Harding, Lebanon AUDIT MANAGER Patricia Heim, Nashville Jay Moeck, CPA, CFE Darlene McNeece, Loudon   Lee Anne Murray, Nashville   Aug 6, 2008   Members of the Registry of Election Finance 404 James Robertson Parkway, Suite 1614 Nashville, TN 37243-1360   Ladies and Gentlemen,    Transmitted herewith are the agreed upon procedures for the campaign finance audit of Senator Mae Beavers’ 2006 election campaign for the Senate. This audit was conducted pursuant to the requirements of T.C.A. §2-10-212.    The procedures were developed to aid the Registry of Election Finance in its responsibilities to monitor and enforce Tennessee’s Campaign Financial Disclosure Law and Campaign Contribution Limits Law. The candidate is responsible for complying with campaign finance laws and the accuracy of campaign financial disclosures. The sufficiency of these procedures is solely the responsibility of the Registry’s internal audit group. Consequently, we make no representation regarding the sufficiency of the agreed upon procedures described in the report for any other purpose than aiding the Registry.    This report is intended for the information and use of the Members of the Tennessee Registry of Election Finance as outlined; and is not intended to be and should not be used by anyone other than the Registry without understanding the objectives, purposes, and underlying assumptions. This report, however, is a matter of public record.         Sincerely,      Jay Moeck, CPA, CFE  Audit Manager  

   

STATE OF TENNESSEE REGISTRY OF ELECTION FINANCE Audit Highlights Senator Mae Beavers 2006 Campaign Finance Audit     AUDIT OBJECTIVES     The objectives of the audit were to determine Senator Mae Beavers’ compliance with certain provisions of campaign finance disclosure laws and regulations; compliance with certain provisions of campaign contribution limits laws and regulations; accuracy and completeness of the disclosures on the 2006 Second Quarter, 2006 Pre-Primary, 2006 Third Quarter, 2006 Pre- General, and 2006 Fourth Quarter Campaign Financial Disclosure Statements; and to recommend appropriate actions to correct any deficiencies.       FINDINGS   1. Sen. Beavers understated total 2. Sen. Beavers failed to itemize all contributions received during her 2006 contributions from individuals who campaign. Sen. Beavers   failed to report all contributed more than $100.00 during a contributions she received during her 2006 reporting period. Sen. Beavers failed to campaign prior to audit notification. Sen. itemize contributions from individuals and Beavers failed to report $5,873.00 or organizations who contributed a total approximately 1% of the campaign’s total amount of more than one hundred dollars contributions on any campaign disclosure. ($100.00) during a reporting period. The The failure to report the contributions is a seven un-itemized contributions totaling violation of T.C.A. §2-10-105(a), which $748.00 (or less than 1% of itemized states that candidates shall file a statement contributions reported) were required to be of all contributions received.   itemized; therefore, Sen. Beavers violated   T.C.A. §2-10-107(a)(2)(A)(i).  

   

 

FINDINGS (Cont.)   3. Sen. Beavers did not follow the 4. Sen. Beavers failed to report all Registry rules for bookkeeping. Sen. campaign expenditures.  Sen. Beavers’ Beavers did not follow Registry Rule 0530- campaign records indicated that she 1-1-.02(8), which states that a candidate disbursed $7,170.83 from her campaign should perform reconciliations of the account; however, she failed to disclose the campaign account and records to the expenditures on any report. The failure to financial disclosure statements. Sen. disclose the expenditures violates T.C.A. §2- Beavers’ campaign account and records 10-105(a), which requires the disclosure of showed several inaccuracies on her all campaign expenses. campaign disclosures, which may not have occurred had the candidate reconciled the campaign account and records to the 5. Sen. Beavers failed to itemize several campaign financial disclosure statements. expenditures to payees who were paid The inaccuracies resulted in the more than $100.00 during a reporting overstatement of contributions by $955.00 period. Sen. Beavers failed to report several (less than 1% of the campaign contributions)  expenditures pursuant to T.C.A. §2-10- and the overstatement of expenses by  107(a)(2)(B), which requires payments of $3,873.07 (less than 1% of the campaign  more than $100.00 to one source during a expenses). reporting period to be itemized. Sen. Beavers improperly reported $1,085.14 (less   than 1% of itemized expenditures reported) of expenditures as un-itemized that were required to be itemized.

   

 

TABLE OF CONTENTS

        INTRODUCTION   Audit Authority Audit Purpose Audit Scope   CAMPAIGN OVERVIEW     Campaign Organization Overview of Financial Activities   CHARTS   2006 Election Campaign Contributions 2006 Election Contributions by Source 2006 Election Contributions by Reporting Period 2006 Election Expenses by Reporting Period     OBJECTIVES, METHODOLOGIES, CONCLUSIONS     Contributions and Receipts   Finding 1 -Sen. Beavers understated total contributions received during her 2006 campaign.     Finding 2 -Sen. Beavers failed to itemize all contributions from individuals who contributed more than $100.00 during a reporting period.     Finding 3 -Sen. Beavers did not follow the Registry rules for bookkeeping.       Disbursements and Obligations   Finding 4 -Sen. Beavers failed to report all campaign expenditures.     Finding 5 – Sen. Beavers failed to itemize several expenditures to payees who were paid more than $100.00 during a reporting period.     Recommendations to Candidate   Recommendations to Registry   RESOLUTIONS   Candidate’s Corrective Actions   Registry of Election Finance Actions

       

 

 

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    INTRODUCTION  

  AUDIT AUTHORITY    In February 2006, the Tennessee Legislators and Governor Phil Bredesen enacted the “Comprehensive Governmental Ethics Reform Act of 2006,” which amended Tennessee’s campaign finance disclosure laws and duties of the Registry of Election Finance. The legislation established the audits of campaign disclosure reports. Tennessee Code Annotated (T.C.A.) §§2- 10-206 and 2-10-212 authorize the Registry of Election Finance (Registry) to conduct audits of campaign financial disclosure statements filed with the Registry. The audit was initiated based on T.C.A. §2-10-212(2), which requires the Registry to audit approximately two percent of all candidates for the general assembly.    AUDIT PURPOSE    The Registry’s campaign finance audits were developed to assist and encourage candidate compliance with campaign disclosure laws. The audit process assists the Registry in providing timely and accurate campaign information to government officials and the general public. The Registry’s audits provide a tool to the Registry to evaluate the effectiveness of the campaign financial disclosure process. In addition, the audits assist the Registry with the enforcement of campaign finance limit laws and campaign finance disclosure laws. Finally, the audit reports are intended to assist the candidate and the State of Tennessee with promoting governmental accountability and integrity.   AUDIT SCOPE    Tennessee’s campaign financial disclosure law requires candidates to make biannual financial disclosures as of the date of the first contribution or first expenditure, whichever occurs earlier. The biannual reporting periods are from January 16 to June 30 and July 1 to January 15 of each year. During an election year, the disclosures expand to quarterly reports, pre-primary reports, and pre-general reports. This audit relates to disclosures made subsequent to the passage and approval of the Comprehensive Governmental Ethics Reform Act of 2006. The act was approved on February 15, 2006. Therefore, the audit reviewed only Sen. Beavers’ disclosures on her 2006 Second Quarter, 2006 Pre-Primary, 2006 Third Quarter, 2006 Pre-General and 2006 Fourth Quarter Campaign Financial Disclosure Statements.                

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      CAMPAIGN OVERVIEW     CAMPAIGN ORGANIZATION    Sen. Beavers was a candidate in the November 7, 2006 general election for Senate for district 17. Sen. Beavers filed an Appointment of Political Treasurer Statement with the Registry on May 31, 2006 appointing herself as political treasurer.    The candidate’s first financial disclosure for the 2006 campaign was the 2006 Annual Supplemental (2003) report filed on February 3, 2004. The candidate’s concluding financial disclosure report for the 2006 election was the 2006 fourth quarter report originally filed on January 24, 2007. The 2006 fourth quarter report, dated January 24, 2007, indicated $10,492.66 in cash on hand, no outstanding obligations, and no outstanding loans. The candidate completed her reporting requirements for the 2006 election campaign as of January 2007 when she transferred her remaining balance to her 2010 election campaign.   OVERVIEW OF FINANCIAL ACTIVITIES    The following financial amounts are a summary of the financial disclosures made by the candidate. The summarized amounts are from the following disclosure reports: 2006 Annual Supplemental (2003), 2006 Annual Supplemental (2004), 2006 Annual Supplemental (2005), 2006 first quarter, 2006 second quarter, 2006 pre-primary, 2006 third quarter, 2006 pre-general, and 2006 fourth quarter reports after amendment. As noted in the audit scope, we only audited disclosures from the 2006 second quarter through the 2006 fourth quarter. The amounts displayed are for informational purposes only. Summary of Financial Activity   (Un-audited Amounts) Cash on hand at January 1, 2003 $812.61 1   Receipts    Itemized $389,606.00   Un-itemized 27,997.24         Interest 2,074.74    Loans receipted 0.00   Total receipts $419,677.98            Disbursements  Itemized 404,154.70    Un-itemized 5,843.23    Loans principal payments 0.00   Total disbursements $409,997.93          Cash on hand at January 15, 2007 $10,492.66          Loans outstanding at January 15, 2007 $0.00          Obligations at January 15, 2007 $0.00          Total in-kind contributions received $4,207.04   1 The cash balance at 1/1/2003 is funds transferred from the candidate’s prior campaign.  - 2 -    

 

  CHARTS      2006 ELECTION CAMPAIGN CONTRIBUTIONS     The following chart shows the contributions reported by the candidate for the 2006 election campaign. $2,074.74, 0% $4,207.04, 1% $27,997.24,  7%

Unitemized Itemized In-Kind Loans ($0.00) Interest

$389,606.00,  92%   2006 ELECTION CONTRIBUTIONS BY SOURCE     The following chart shows the monetary contributions reported by the candidate for the 2006 election campaign. Organizations in this chart represent non-profits, individual candidate’s campaign funds, or non-incorporated business. 4 Individuals $27, 7 99 % 7.2, $2,074.74 ,  0% PACs $18,375.00 , Organizations 4% $174 4 , 1 10 % 6.00 ,  Candidate ($0.00) Un-itemized $197,125.00  , contributions 48% Interest earnings

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$165,196.74

2006 ELECTION CONTRIBUTIONS BY REPORTING PERIOD     The following chart shows the contributions that the candidate reported for the 2006 election campaign by reporting period. $200,000.00 $150,000.00 $100,000.00 $87,910.00 $55,583.00 $31,335.00 0.00 $50,000.00 $16,797.24 $23,870.0 $ 0 34,04 $600.00 $4,346.00 $0.00 2003 Early Supplemental 2004 Early Supplemental 2005 Early Supplemental 1st Qtr 2nd Qtr Pre-Primary 3rd Qtr Pre-General 4th Qtr       2006 ELECTION EXPENSES BY REPORTING PERIOD     The following chart shows the expenses that the candidate reported for the 2006 election campaign by reporting period. $250,000.00 $200,000.00 $150,000.00 $100,000.00 $50,000.00 $23,274.00 $8,788.79 $3978.65 $19,366 $7,656.23 $527.27  ,  $2,342.37 .77 $0.00 2003 Early Supplemental 2004 Early Supplemental 2005 Early Supplemental 1st Qtr 2nd Qtr Pre-Primary 3rd Qtr Pre-General 4th Qtr      

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$205,887.91 $138,175.94

   

 

    OBJECTIVES, METHODOLOGIES, CONCLUSIONS     CONTRIBUTIONS AND RECEIPTS   Audit Objectives:       The objectives of our audit of contributions and loans were to determine whether:    •   campaign contributions from individuals and Political Action Committees (PAC) were within limits;   •   all contributions were from non-prohibited sources;    •   all contributions received were reported, reported in the proper period, reported in compliance with T.C.A. §§2-10-105 and 2-10-107, and reported in compliance with the Registry’s rules;   •   all monetary contributions were supported by bank statements and deposit slips;   •   all in-kind contributions were supported by donation letter or other appropriate supporting documentation;   •   all interest and other investment earnings received were reported, reported in the proper period, and supported by bank or investment statements;   •   loans received were reported to the Registry, reported in the proper period, reported in compliance with T.C.A. §§2-10-105 and 2-10-107, and reported in compliance with the Registry’s rules; and   •   loans received from lending institutions were supported by loan agreements.   Audit Methodology:    The Registry obtained Sen. Beavers’ 2006 Campaign Financial Disclosure Statements from April 1, 2006 to January 15, 2007. We requested Sen. Beavers to provide her campaign records to support all contributions, loans, and interest that she received during her 2006 election campaign. Sen. Beavers’ campaign records for contributions included bank statements, deposit slip copies, and copies of contribution checks. The following steps were performed on Sen. Beavers’ campaign documentation:   •   The documentation was reviewed to determine if the candidate’s contributions received from April 1, 2006 thru January 15, 2007 totaled $280,961.00.  

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•  A list of contributions was prepared and compared to the candidate’s bank statements to determine if the candidate deposited all funds into a campaign bank account and properly recorded the funds.   •   A list of contributions by contributor was prepared and compared to the candidate’s itemized contributions reported during the election to determine if campaign contributions from individuals and PACs complied with campaign contribution limits, T.C.A. §2-10-301, et seq.   •   Contributions lists and bank statements were reviewed to determine if all contributions were reported, all receipts received were reported, all contributions were reported in the proper period, all contributions were reported in compliance with T.C.A. §§2-10-105 and 2-10-107, and all contributions were in compliance with the Registry’s rules.   •   The candidate’s campaign records were reviewed to determine if the candidate in- kind contributions from April 1, 2006 thru January 15, 2007 totaled $1,907.04.   •   The candidate’s campaign records were reviewed to determine if the candidate received interest from April 1, 2006 thru January 15, 2007 totaled $2,074.74.    •   A schedule of interest earnings was prepared from the candidate’s campaign disclosures and compared to the candidate’s bank statements to determine if all interests and investment earnings received were reported and reported in the proper period.    Audit Conclusion:     Sen. Beavers’ 2006 Campaign Financial Disclosure Statements from April 1, 2006 to January 15, 2007 consisted of the 2006 second quarter, 2006 pre-primary, 2006 third quarter, 2006 pre-general, and 2006 fourth quarter reports. Sen. Beavers’ campaign records indicated that she failed to report $5,873.00 in campaign contributions that she received during the audit period. (Finding 1) In addition, Sen. Beavers failed to itemize contributions from individuals and/or organizations who contributed a total amount of more than one hundred dollars ($100.00) during a reporting period in violation of T.C.A. §2-10-107(a)(2)(A)(i). (Finding 2) Sen. Beavers’ campaign records had several discrepancies in contributions and expenses that resulted in an overstatement of $955.00 in campaign contributions. The discrepancies indicated that Sen. Beavers did not reconcile her bank accounts and campaign records to her campaign disclosure statements, which is a violation of Registry rules. (Finding 3) Finally, Sen. Beavers did not properly maintain campaign records for un-itemized cash contributions. (Finding 4) The campaign records indicated that Sen. Beavers received $2,074.74 in interest from April 1, 2006 to January 15, 2007. Sen. Beavers’ campaign records and disclosures indicated that she reported contributions except as noted in the findings in compliance with campaign finance limits and in compliance with campaign finance laws. Sen. Beavers reported no loan contributions from April 1, 2006 to January 15, 2007.  

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