REPORT OF THE AUDIT DIVISION

ON

ALEXANDER FOR PRESIDENT, INC.,

ALEXANDER FOR PRESIDENT COMPLIANCE COMMITTEE, INC., AND

ALEXANDER AUDIT FUND, INC.

EXECUTIVE SUMMARY

Alexander for President Committee, Inc. (the Primary Committee) registered with the Federal Election Commission on January 19, 1995. In addition, the Alexander for President Compliance Committee, Inc. (the Compliance Committee) and the Alexander Audit Fund, Inc. (the Fines Committee) registered with the Federal Election Commission on January 23, 1995 and March 18, 1996 respectively.

The audit was conducted pursuant to 26 U.S.C. §9038(a), requiring the Commission to audit committees authorized by candidates who receive Federal Funds. The Candidate received $4,573,444 in matching funds from the U.S. Treasury.

The findings of the audit were presented to the Committees at an exit conference held at the completion of field work and later, in an Exit Conference Memorandum. The Committees' responses to those findings are contained in the audit report.

The following is an overview of the findings contained in the audit report.

APPARENT CONTRIBUTIONS RESULTING FROM UNTIMELY PAYMENTS FOR TRAVEL ON CORPORATE AIRCRAFT - 2 U.S.C. §441b(a) and 11 CFR §§100.7(a)(1)(iii) and 114.9(e). A review of travel on corporate aircraft utilized by the Primary Committee identified costs incurred that were not fully paid in advance. All of the travel in question occurred in late 1994 and early 1995. The Primary Committee's Treasurer explained that the staff person who handled travel in the early days of the campaign misunderstood the regulatory requirements. The Primary Committee discovered and corrected the errors prior to the audit. The amount not timely paid was $17,618.

APPARENT NON-QUALIFIED CAMPAIGN EXPENSES - COMPLIANCE COMMITTEE EXPENSES PAID BY THE PRIMARY COMMITTEE - 11 CFR §§9032.9(a) and 9034.4(b)(3). The Audit staff noted that the Primary Committee made two disbursements totaling $6,535 for expenses incurred by the Compliance Committee. The Primary Committee argued that the Commission's regulations are inconsistent in that they do not allow such expenses to be paid by the Compliance Committee if the Candidate is not successful, and yet regard the expenses as non-qualified campaign expenses if paid by the Primary Committee. Nonetheless, the Primary Committee acknowledged that under the regulations these expenses are non-qualified. The Commission determined that a prorated portion of the amount ($1,469) is repayable to the U.S. Treasury.

MATCHING FUNDS RECEIVED IN EXCESS OF ENTITLEMENT - 11 CFR §§9034.1(b) and 9038.2(b)(1). Audit staff calculated that the Candidate received matching funds in excess of his entitlement totaling $835,338. The excess resulted primarily from the Primary Committee's overstatement of estimated winding down expenses on its Statement of Net Outstanding Campaign Obligations. The Commission determined that this amount was repayable to the U.S. Treasury. A repayment of $631,977 was received on February 4,1997, leaving a balance of $203,361.

STALE-DATED CHECKS - 11 CFR §§9038.6 and 9007.6. The Audit staff identified checks issued by the Primary Committee and the Compliance Committee totaling $37,966 and $12,200 respectively, that had not been negotiated. The Committees paid these amounts to the U.S. Treasury on November 15, 1996, and December 11, 1996. Subsequently, a $1,000 check issued by each committee was negotiated, reducing the amount due to $36,966 and $11,200 respectively. The Commission determined that the lesser amount was payable to the U.S. Treasury and the overpayments were credited to other amounts due.

ALEXANDER AUDIT FUND, INC. (FINES COMMITTEE)

The Audit staff did not detect any material non-compliance during the audit of the Fines Committee.