Originally posted on CompleteCampaigns.com and written by Benjamin A. Katz
Secrets to Keeping the Federal Election Commission Happy
Filing campaign statements with the Federal Election Commission (FEC) or any government agency can be a nerve racking and mentally exhausting experience. Having to itemize nearly every transaction, complete complicated forms and follow obscure rules make reporting a challenging job.
The frequency of reports, rapid turnaround required during election season and requirement for exact reporting makes campaign reporting scary for even the most seasoned professional accountant.
With all of that said, after working for years with many clients, we have come up with some best practices for staying out of trouble and keeping the FEC happy.
PART I: USE GOOD SOFTWARE
In part I of this series, I will discuss what to look for in campaign reporting software and how it can make your job preparing Federal Election Commission reports easier and more effective. I’m clearly biased about what software to use for campaign finance reporting. However, with ever increasingly complicated reporting requirements it is extremely important to use software that will assist in fulfilling these requirements.
For example, the Federal Election Commission requires the itemization of donors who contribute more than $200 during the election cycle and vendors who are paid more than $200. This includes indirect transactions. If your committee pays $150 to your local copy center and a volunteer is reimbursed for an additional $75 spent at the same copy shop, you’ve paid in excess of $200 and need to itemize these transactions.
These, in conjunction with other rules for aggregating itemizations and complicated limits make it nearly impossible to do reporting by hand.
Good software will include a variety of features that make reporting easier to do and easier to get right. These include:
Field Name: #002
**Fail** is Required, but field is Empty
A high quality product will check for missing or invalid data and provide easy to read error messages such as:
Missing occupation and/or employer for John Doe.
In our BackOffice system, we’ve taken this a step further. These errors can be clicked to open up a new window where you can easily fix whatever the problem is.
B. Contribution Limits & Allocation Thresholds
FEC contribution limits can be complicated. Donors can give directly or through a partnership or intermediary. They can give for the current, past or future elections (in certain circumstances.) And, different types of entities (individuals, PACs, etc.) have different limits. While you should be familiar with the limit rules, it is also important that you have software that will assist you in tracking these limits and alert you before you accept a contribution in excess of limits.
C. Reconciliation Reports
It always amazes me when I learn of a campaign treasurer that is willing to file an FEC report without performing monthly bank reconciliations. Failing to reconcile your filing/accounting system with the actual bank records creates a situation where a report can easily be filed with incorrect information.
Some treasurers are comfortable using a separate system for reconciliations, such as QuickBooks. In my opinion, this is little better than not doing reconciliations. Using a separate system creates a false sense of security and in many ways increases the possibility of problems.
D. A Single Integrated Solution
Having a single system that can be used for all facets of campaign reporting and accounting makes a treasurer’s life much easier and more productive. With a single system, it is easier to generate reports; it takes less time to find and correct mistakes and it cuts down on duplicate data entry and time spent transferring and exchanging data.
Further, a system that works for the rest of the campaign team helps ensure better data. When the fundraising team is using the same system to generate solicitation letters, he/she will be committed to making sure that you have correct and up-to-date addresses. Their own self-interest will assist you in filing accurate and complete FEC reports.
Some providers claim that simply because their product is web-based it can also be used by the campaign fundraiser, but this simply is not true. Fundraisers have different needs – they need to code people, track pledges, store additional contact information and log communication histories. If your software package doesn’t do all of this, you can assume that the rest of the campaign team will be using separate tools.
E. Easy & Integrated E-filing
Electronic filing shouldn’t be difficult. Your software provider should make it easy for you. It is a safe bet that they’re probably not a great solution if they provide you instructions such as:
Also, under Proxy Server Information, the fields Server IP, Proxy user ID, and password must be determined by the client’s Network Administrator. It may be that your proxy server will not have a proxy user ID or password but these items can only be determined by your Network Administrator. (I really didn’t make this up — www.aristotle.com/html/efiling.htm)
E-filing should be as easy as entering in your e-filing password and clicking a button.
F. Intuitive interface
The look and feel of the software matters. If the tools are difficult to use, they’re going to make it harder to create and file FEC reports. Many providers require you to memorize and hand enter reporting codes or unique ID numbers.
When looking at software options, ask about less common transactions such as itemizing credit cards or reimbursements, partnerships and intermediaries. If the vendor requires you to manually enter an ID number rather than allowing you to lookup by name, you’ll spend significantly more time creating your report and you’ll be more likely to make mistakes.
G. Support & Upgrades
Regardless of the tools you use, FEC reporting is never easy and the rules often change. When looking at providers, find out about their support plan. If they do not include unlimited support and 24-7 emergency support, they will not be there to assist you when you have problems.
A good software solution will also be regularly updated to meet changing needs and requirements. In a web-based model, it’s generally very easy to provide updates. CompleteCampaigns.com averages 2 – 3 additions to our software every week based on changing regulations and client requests.
A company without a strong commitment to an improving product will not be able to meet your changing needs. When evaluating providers, ask when their software was last updated.
When considering software solutions for your campaign, I hope that you’ll take a serious look at BackOffice but I hope even more that this article has been helpful in giving you good ideas to make your campaign run smoother and avoid problems with the FEC.
See also: Part II: Beyond the Software