City and County of San Francisco
Ethics Commission

English

SAN FRANCISCO  ETHICS COMMISSION AUDIT REPORT:

RADULOVICH FOR SUPERVISOR

I.           Introduction

This Audit Report summarizes the results of the audit of the committee, Radulovich for Supervisor, Identification Number 1244809 (“the Committee”), for the period from January 1, 2002 through January 31, 2003.  The audit was conducted to determine whether the Committee materially complied with the requirements of the Political Reform Act (“the Act”) (California Government Code Section 81000, et seq.) and San Francisco’s Campaign Finance Reform Ordinance (“CFRO”) and Electronic Filing Ordinance (S.F. Campaign and Governmental Conduct Code Sections 1.100, et seq., and 1.300, et seq., respectively).

For the period covered by the audit, the Committee received $47,325 in contributions and $31,585 in public funds, and incurred expenditures of $75,574.  The CFRO provides that any candidate who receives public funds must return unexpended campaign funds to the Election Campaign Fund up to the amount of public funds received by the candidate.  The auditor determined that the Committee had unexpended funds of $2,361.83, which it must return to the Election Campaign Fund.[1]

There were two material findings with respect to this Audit: 1) the Committee failed to obtain and disclose contributor information for four contributions in violation of San Francisco Campaign and Governmental Conduct Code section 1.114(e); and 2) the Committee improperly conducted cash transactions, as follows: a) it failed to deposit $1,554.67 in cash contributions into the campaign bank account in violation of Government Code Section 85201(c); and b) it used these cash contributions to make a cash expenditure, which was in excess of $100, in violation of Government Code Sections 85201(e) and 84300(b).

II.         Committee Information

The Committee was formed in June 2002 to support the election of Tom Radulovich to Member, Board of Supervisors, District 8, in the November 5, 2002  general election.  Susan Stephenson was the Committee’s treasurer.  As stated above, the Committee received public funds for Mr. Radulovich’s 2002 supervisorial campaign. 

III.       Audit Authority

San Francisco Charter Section C3.699-11 authorizes the Ethics Commission to audit campaign statements that are filed with the Commission.  Section 1.150(a) of the CFRO requires the Commission to audit all candidates who receive public financing.  Audits of publicly financed candidates include a review of campaign statements and other relevant documents to determine whether the candidate complied with applicable requirements of State and local law.

IV.        Audit Scope and Procedures

This audit was performed in accordance with generally accepted auditing standards.  The audit involved a thorough review of the Committee’s records for the time period covered by the audit.  This review was conducted to determine:

• Compliance with all disclosure requirements pertaining to contributions, expenditures, accrued expenditures, and loans, including itemization when required;
• Compliance with applicable filing deadlines;
• Compliance with restrictions on contributions, loans and expenditures;
• Accuracy of total reported receipts, disbursements and cash balances as compared to bank records;
• Compliance with all record-keeping requirements; and
• Compliance with all provisions related to the Commission’s public financing program.

V.         Summary of Applicable Law

S. F. Campaign and Governmental Conduct Code Section 1.114(e): Requirement to Obtain and Disclose Contributor Information[2]

S. F. Campaign and Governmental Conduct Code (“S.F. C&GCC”) Section 1.114(e) states that if the cumulative amount of contributions received from a contributor is $100 or more, the committee treasurer must not deposit the contribution unless the committee treasurer has the following information: the contributor’s full name; the contributor's street address; the contributor’s occupation, and the name of the contributor’s employer or, if the contributor is self-employed, the name of the contributor’s business.  S.F. C&GCC Section 1.114(e) states that each treasurer who receives a contribution that does not comply with the requirements of this Section must forfeit the contributions to the City and County for deposit in the General Fund.

Government Code Section 85201(c):  Requirement to Deposit Contributions into Campaign Bank Account

Government Code Section 85201(c), which is incorporated into local laws by SFC&GCC Section 1.106, requires that all contributions or loans that are received by the candidate, a person on behalf of the candidate, or the candidate’s controlled committee, be deposited into the campaign bank account.

Government Code Section 85201(e):  Requirement to Make Expenditures from Campaign Bank Account

Government Code Section 85201(e), which is incorporated into local laws by SFC&GCC Section 1.106, requires that all expenditures be made from the campaign bank account.

Government Code Section 84300(b): Cash Expenditures of $100 or More

Government Code Section 84300(b), which is incorporated into local laws by SFC&GCC Section 1.106, prohibits cash expenditures that equal or exceed $100.

VI.        Material Findings

S. F. Campaign and Governmental Conduct Code Section 1.114(e): Failure to Obtain and Disclose Contributor Information

A review of the Committee’s campaign statements indicated that the Committee itemized 201 contributions.   Of the 201 itemized contributions, the Committee provided P.O. Box addresses instead of street addresses for two contributors and did not provide contributor’s occupation and employer information for two contributors.   

As explained above, under S.F. C&GCC §1.114(e) contributions that are deposited without the required contributor information must be forfeited to the City.   The amount that is subject to forfeiture is the amount that exceeds the first $99.99 of a contributor’s contribution; i.e., on a $100 contribution that lacks the required contributor information, the amount subject to forfeiture is one cent.  The above-referenced four contributions that lack the required contributor information were $100 each.  Thus the amount subject to forfeiture in regards to each of the four contributors who contributed $100, is one cent. 

Government Code Section 85201(c); 85210(e); 84300(b): Failure to Deposit Contributions Prior to Use and Making Cash Expenditures of $100 or More

The Committee received cash contributions totaling at least $1,544.67 that were not deposited into its campaign bank account as required under Government Code Section 85201(c).  Such contributions were then used to make a cash expenditure for a campaign-related expense in the same amount, when Government Code Section 85201(e) requires all expenditures to be made from the campaign account and Section 84300(b) prohibits cash expenditures that equal or exceed $100.

VII.      Conclusion

Through the examination of the Committee’s records and campaign disclosure statements, the Auditor found that 1) the Committee failed to obtain and disclose contributor information for four contributions in violation of San Francisco Campaign and Governmental Conduct Code section 1.114(e); and 2) the Committee improperly conducted cash transactions, as follows: a) it failed to deposit $1,554.67 in cash contributions into the campaign bank account in violation of Government Code Section 85201(c); and b) it used these cash contributions to make a cash expenditure, which was in excess of $100, in violation of Government Code Sections 85201(e) and 84300(b).

Audit reports are posted to the Commission’s web site and are forwarded to the members of the Ethics Commission and, in cases of a violation of law, to the appropriate enforcement agency.  

Date:  December 29, 2003

---