In order to understand the e-filing process, we interviewed and observed dozens of people, including those who file reports to the FEC, people in various job roles at the FEC, and vendors of commercial campaign finance software. While these stakeholders that comprise the e-filing ecosystem may have different missions within their own organizations, they all play critical roles in helping the FEC achieve its mission of publicly disclosing campaign finance activity.
The e-filing ecosystem
Our understanding of the way campaign finance information flows through the e-filing ecosystem is depicted in Figure 1.
Figure 1. The flow of campaign finance information throughout the e-filing system. [Full size image]
Committees, candidates, parties, and PACs accept contributions and spend money to fund political committees.
Each committee or committee’s designee tracks the flow of funds and then reports this information to the FEC using paper forms, vendor software, or the FEC’s filing software, FECFile.
The data in these reports passes through the Electronic Filing Office (EFO) and then moves on to the Reports Analysis Division (RAD), where algorithms and analysts review the report and check for errors and discrepancies. The data is also augmented with helpful codes, like committee IDs and type descriptions.
At the same time that the report is being reviewed, it is made publicly available so data consumers (including journalists and the general public) can access it through the FEC’s website, API, and bulk data offerings.
FEC has been a pioneer in open data, but some data available on the FEC website remains difficult for journalists, researchers and others to use. During this study, we learned that many data quality issues can be traced back to confusing elements in the filers’ experience when they are preparing information for the FEC. When filers make mistakes or misunderstand form fields, their errors have repercussions through the entire data ecosystem: data entry errors create a greater processing burden on the EFO and heavier workload for FEC Personnel, both of which can lead to delays in data becoming publicly available. Ultimately, errors impact the timeliness and accuracy of data available to the public.
A complex process
Filing is just one element of the complex campaign fundraising processes
Participants in the the campaign finance (candidates, committees, parties, and PACs) process have a complex set of processes to manage: courting voters, working with candidates, recruiting donors, raising and collecting money, using it to pay for campaign related expenses, and balancing their checkbooks. Filing activities follow timelines and processes separate from day-to-day campaign activities: filing deadlines are defined in the Federal Election Campaign Act (FECA), and depend on the type of committee. Filings may be monthly, quarterly or semi-annual depending on committee type and whether or not in an election year. Committees involved in an election must also file pre and post election reports and often must report certain financial activity within 24 or 48 hours of occurance. Read more about filing requirements. Additionally, the people managing the campaign on a daily basis are often not the people who file reports.
The two interviewees quoted below are compliance professionals who file on behalf of multiple clients. Here they describe conflicts between the rhythms of their clients’ day-to-day work and FEC reporting rules and schedules.
“It is all scheduled and triggered by schedules. And the 24 and 48 [reporting] reporting schedule… [We] set up a process to track the spending. [I have] some clients who have their own spreadsheets. Some have their own software. [I have] to explain to clients: ‘This is different.’ It’s all scheduled dates, and 24 and 48 [hour reports] which are triggered by spending. I’m back end compliance, we set up a process to track the spending. Some clients have spreadsheets, some have sophisticated systems. Every client is different--no one size fits all process.”
“I have one unit that has like 15 different payrolls. Some of them are weekly, some of them are bi-weekly, some of them are semi-monthly. And just the reconciliation process is the most challenging aspect of it, ‘cause you’ve got to go through and when you’re doing multiple payrolls for periods that don’t end on the end of the month — the last one ended on the 28th. We started in the middle — we started on the 20th of October, and then the period closed on November 28th — so when you go to reconcile with the bank, you don’t have a definitive cutoff date. You have to get interim statements from the bank, and not all the payrolls may have cleared.”
Filing software requires filers to manually integrate data from a variety of physical and digital sources. Many of the filers we talked to use financial and accounting software applications (such as Quickbooks), payroll application exports, bank statements, membership databases, and physical check registers to help them complete their filings. Many rely on Microsoft Excel as an intermediary or central exchange to tie the tools together.
Some committees use commercial campaign finance management software that is designed to support more campaign processes in addition to reporting capabilities. Because the FECFile software is designed to support reporting activity alone, FECFile users must bridge the gap between the process and data format required by FECFile and their existing campaign management workflows. This often requires significant overhead tasks both before and after they enter data into FECFile, and makes reporting more onerous.
"I download through ActBlue, where most of my transactions come from. Then I have a [Microsoft Excel] file where everyone that’s given me cash or check... I take the form, cut and paste everything. I do everything in the format of Act Blue; I have to reformat everything for FEC."
How committees file
Committees and their designees file their reports to the FEC in one of a few ways:
Filers using FEC provided software
[59% of entities filing electronically]
There are two principal ways filers can use FEC provided software to file: using FECFile, a desktop based application for filing most forms, and for some filers, using specific forms that have been developed as web applications. The vast majority of filers use the former, FECFile, to complete at least some of their filings.
FECFile is free software designed to support political committees in reporting their campaign finance activity to the FEC. Committees that use FECFile often have relatively small budgets; several people we talked to described committees that use FECFile as "grass roots," and postulated that these committees choose FECFile because they cannot afford commercial software.
Most filers who typically report small numbers of transactions use FECFile (92% of the filers in a survey we conducted). One way to interpret this number is that it is the small “mom and pop” committees that help the FEC live up to its ideal that “anyone can run for office” and who really rely on FECFile being easy to use.
The majority of FECFile users in our survey (59%) identified themselves as treasurers for candidates, committees, parties or PACs, and 100% of self-identified treasurers said their reports typically include fewer than 50 transactions. Only 17% percent of FECFile users in our survey identified themselves as compliance professionals. Because most FECFile users are not compliance professionals and typically work for small campaigns, they may be learning the rules of campaign finance reporting at the same time they are trying to learn the ins and outs of electronic filing and the idiosyncrasies of filing software.
Over half (58%) of FECFile users in our survey estimated that their reports typically include fewer than 50 transactions, 27% said their reports typically included 51-300 transactions, and only 13% reported that their reports typically include more than 300 transactions. This is in contrast to the respondents who typically use vendor software who file higher volume reports (Figure 2).
Figure 2. Number of transactions on a typical report by type of filing software typically used. [Full size image]
RAD analysts in the Authorized and Party/Non-party branches estimated that 50-60% of calls come from novice filers, and observed that novices and infrequent callers take up a much larger percentage of the actual time they spend on the phone. We asked RAD analysts in the Compliance Branch to characterize the people they get calls from:
“...[I] spend more time with the people who are novices just learning about filing. Most people are novices."
Commercial software filers
[41% of entities filing electronically]
Some political committees can purchase tools to help manage campaign finance tasks, including fundraising, list management, and reporting to the FEC. This software typically costs hundreds of dollars per month, and allow committees to complete many campaign finance tasks within a single system. These filers often report their information to the FEC using the same system they use to process and store their financial data.
Filers who raise or spend $50,000 or less in a calendar year may choose to file on paper. While these make up the largest number of paper filers, the relatively low transaction amount limits the burden they impose on the agency. Filers who raise or spend more than $50,000 during an election cycle must file electronically, with one exception: Senate filers.
By transaction volume, Senate filers generate the most paper because they are bound by Senate rules to first file with the Secretary of the Senate, who currently only accepts paper filings. The Commission’s 2016 Legislative Recommendations identified that e-filing for Senate committees could save at least $876,000 per year and make these vital records available to the public within minutes. Discontinuing larger paper filings was also one of the major recommendations of the an E-Filing Study that the FEC commissioned in 2013.