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On the Fast Track: 2007 Audit Cycle Completed

As part of its voter-approved mandate, the City Ethics Commission regularly audits the political committees of City candidates. The City’s charter and administrative code determine which committees and candidates are subject to an audit.

In January 2008, the City Ethics Commission completed its Fast Track Audit (“FTA”) program in connection the 2007 regular and special elections. For that audit cycle, Commission auditors were required to audit 27 committees that together received $4.3 million in contributions and spent $4.5 million. Instituted during the 2005 audit cycle, the FTA program enables audits to be completed within 29 business days for Citywide committees, and 20 business days for City Council committees.

For the 2007 audit cycle, 63 percent of the committees audited – or 17 of 27 – had clean audits with no audit findings.

For the ten committees that had audit findings -- instances where the committee failed to demonstrate that it complied with the law -- typical findings included: receiving money from an impermissible source (such as a lobbyist), receiving a larger contribution from a single source than allowed, or failing to provide the Ethics Commission with copies of campaign advertisements for the public file as required by City law. Audits with findings are forwarded for further review as a matter of course to the Ethics Commission’s Enforcement Division, the City Attorney’s Office (pursuant to City Charter Section 470 (n)(1)), and the state Fair Political Practices Commission.

The Commission’s written audit reports serve three purposes:

First, audits determine the candidate’s, treasurer’s and committee’s degree of compliance during a campaign with state and City campaign finance laws and regulations. In this capacity, the audits have historically played an ongoing role in the Commission’s enforcement. All audit reports are forwarded as a matter of course to the CEC’s Enforcement Division, the City Attorney’s Office (pursuant to City Charter Section 470 (n)(1)) and the Fair Political Practices Commission after the audit is completed.

Secondly, audits help ensure that a candidate's fundraising and expenditure information are accurately disclosed to the public. Significant reporting errors by a committee are included as findings on the written audit report, and the audit reports themselves are designed provide an understandable public record of the committee's compliance with applicable laws.

Finally, the audits serve as a means of educating candidates and treasurers by informing them about areas where the campaign recordkeeping practices could be improved.

Los Angeles Administrative Code § 24.6, requires Ethics Commission staffers to audit the records of each candidate who raises or spends $100,000 or more in connection with a primary, general or special City election. The code also requires the Commission to audit any candidate that receives public matching funds. Auditors determine the order in which candidates and committees will be audited, based on the following factors:

- the office sought;
- the amount of money raised and spent by the candidates;
- whether the candidate received matching funds;
- problems identified during the campaign, if any; and
- how highly the race was contested.

The Commission’s Fast Track Audit program was designed with input from campaign treasurers and was designed to improve the timeliness of completing mandatory audits through improved cooperation in the audit process without sacrificing audit quality or sound public policy. For copies of the Commission’s 2007 audit reports, please go to the audit section of our Web site.

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