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San Francisco Ethics Commission Audit Report: Jane Kim for Supervisor 2010, FPPC ID #1324277


I. Introduction

This Audit Report summarizes the audit results of the committee, Jane Kim for Supervisor 2010, Identification Number 1324277 (“the Committee”), from January 1, 2010 through December 31, 2010.  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”) (San Francisco Campaign and Governmental Conduct Code section 1.100, et seq).

II. Audit Authority

San Francisco Charter section C3.699-11 authorizes the Ethics Commission (“the Commission”) to audit campaign statements that are filed with the Commission along with other relevant documents to determine whether the committee complied with applicable requirements of State and local laws. 

III. Audit Scope and Procedures

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

  1. Compliance with all disclosure requirements pertaining to contributions, expenditures, accrued expenditures, and loans, including itemization when required;
  2. Compliance with applicable filing deadlines;
  3. Compliance with restrictions on contributions, loans, and expenditures;
  4. Accuracy of total reported receipts, disbursements, and cash balances as compared to bank records; and
  5. Compliance with all record-keeping requirements.
  6. Compliance with all provisions related to the Commission’s public financing program; and
  7. Any unexpended public funds that must be returned to the City up to the amount of public funds received by the candidate.

The Commission posts audit reports to its web site and, in cases of apparent violations of law, forwards them to the appropriate enforcement agency.

IV. Committee Information

The Committee was formed in January 2010 to support the election of Jane Kim to the Board of Supervisors, District 6 in the November 2, 2010 general election.  During the period covered by the audit, the Committee’s Treasurer was Peggy Lee and Sin Yen Ling was the Assistant Treasurer.  The Committee was active as of December 31, 2010.

V. Audit Findings

For the period covered by the audit, the Committee received $135,005 in monetary contributions and $90,817 in public funds, and incurred $249,402 in expenditures.  The CFRO provides that any candidate who receives public funds must return unexpended campaign funds to the Election Campaign Fund.  The Committee does not have any unexpended funds.

The Commission determined that there were two material findings with respect to the audit of the Committee. 

  1. The Committee did not keep documentation to substantiate 28 percent of expenses incurred by the Committee, in violation of the San Francisco Campaign & Government Conduct Code (S.F. C&GC Code) section 1.109, California Government Code section 84104, and Fair Political Practices Commission Regulation section 18401.

Government Code section 84104, which is incorporated into local law by S.F.  C&GC Code section 1.106, and S.F. C&GC Code section 1.109 require all candidates and committees that  file campaign statements to maintain detailed accounts, records, bills, and receipts as necessary to prepare those statements. Each candidate or committee must retain for a period of four years detailed information and original source documentation supporting those statements.

The total amount of expenses that lack supporting documentation (i.e., invoices, receipts, contracts or timesheets) is $70,417, which represents 28 percent of total expenditures incurred by the Committee. Please see table below.

Table 1: Summary of total expenses for which the Committee did not provide supporting documentation:           

Type of Expenses Amount As percentage of total campaign expenditures
I. Expenses  (Schedule E, not including salaries) $1,227.06 0.49%
II. Sub-vendor payments (Schedule G) $28,981.40 11.62%
III. Salary Expenses $40,209.50 16.12%
Total Expenses  (Expenses plus Salaries) $70,417.96 28%
  1. The Committee made five cash expenditures of over $100 each in violation of Government Code section 84300.

Government Code section 84300, which is incorporated into local law by S.F. C&GC Code section 1.106, prohibits cash expenditures of $100 or more.

The Committee incurred cash expenditures of over $100 as evidenced by cash withdrawals shown on the Committee’s bank statements. Please see table below.

Table 2: Cash Withdrawals Made by the Committee: 

Date Description Amount
9/15/10 Cash withdrawal $500
10/4/10 Cash withdrawal $500
10/13/10 Cash withdrawal $2,000
11/15/10 Cash withdrawal $500
11/18/10 Cash withdrawal $500
Total $4,000

Based on the Commission’s review of the Committee’s records, it appears that the Committee made the above-referenced cash withdrawals to pay the salary of one of its employees.  The Committee reported paying the employee $4,000; however, there are not checks for this amount that cleared the bank.  As required by law, the Committee should not have paid this employee with cash payments.

VI. Committee’s Response to Finding:

The Committee provided the following comments with respect to the audit findings:

The Committee utilized the services of volunteer treasurers who used their best efforts to comply with the law. The Committee’s new treasurer has worked diligently with Ethics Commission staff to provide available documentation for all expenditures.

The $4,000 in expenditures in question represent a small percentage of the Committee’s total expenditures.  The Committee utilized the services of volunteer treasurers who used their best efforts to comply with the law in making all campaign expenditures.

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