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Best Practices for Committee Management

Published in the April 2009 Record

While the misappropriation of committee funds is not common, the Commission has encountered a number of cases where political committee staff misappropriated funds. In addition to the difficulties committees face in discovering that funds are missing, misappropriations are often accompanied by the filing of inaccurate disclosure reports with the FEC, leaving committees vulnerable to FEC enforcement action and potential liability for those reporting errors.

To help protect committees, the FEC created a safe harbor for political committees that have certain internal controls in place to prevent misappropriations and associated misreporting. Under this provision, if these internal controls are in place at the time of a misappropriation, and the committee follows the post-discovery steps described below, the FEC will not seek a civil penalty against the political committee for filing incorrect reports due to the misappropriation of committee funds. This article answers common questions about the best way for committees to protect themselves in case of a misappropriation.

Questions Answered:

What are the minimum internal controls required for the safe harbor?

In order to avail itself of the safe harbor, a political committee must implement these minimum internal controls:

What should the committee do if it discovers a misappropriation?

As soon as a misappropriation is discovered, the political committee must notify law enforcement. The committee also must notify the FEC and file amended reports to correct any reporting errors due to the misappropriation.

Is there anything else the committee can do to prevent misappropriations?

The Commission recommends that political committees implement additional internal controls to help prevent misappropriation of funds and the filing of inaccurate disclosure reports. The recommended controls include:

Additional Information

For more information on the safe harbor and for additional measures committees may take to prevent misappropriation, please consult the Statement of Policy [PDF] and the list of recommended controls [PDF].

 

 

This article provides guidance on certain aspects of federal campaign finance law. It is not intended to replace the law or to change its meaning, nor does it create or confer any rights for or on any person or bind the Federal Election Commission (Commission) or the public. The reader is encouraged also to consult the Federal Election Campaign Act of 1971, as amended (2 U.S.C. 431 et seq.), Commission regulations (Title 11 of the Code of Federal Regulations), Commission advisory opinions, and applicable court decisions.  For further information, please contact:

Federal Election Commission
999 E Street, NW
Washington, DC  20463
(800) 424-9530; (202) 694-1100
info@fec.gov
www.fec.gov