Federal Election Commission Performance and Accountability Report (Reports Consolidation Act of 2000) Fiscal Year 2009 Federal Election Commission Performance and Accountability Report (Reports Consolidation Act of 2000) Fiscal Year 2009 Federal Election Commission 999 E St., N.W. Washington, D.C. 20463 (202) 694-1000 1-(800) 424-9530 www.fec.gov Released November 16, 2009 Federal Election Commission Performance and Accountability Report 2009 TABLE OF CONTENTS Messgae From Th e Chairman ...................................................................................iii How To Use Th is R eport ............................................................................................v SECTION I: MANAGEMENT'S DISCUSSION AND ANALYSIS .......................................................1 Section I.A: Mission and Organizational Structure .......................................................................1 How the FEC is Organized ........................................................................................1 Disclosure, Compliance and Enforcement ..................................................................2 Encouraging Compliance through Education .............................................................3 Enforcing the FECA ...................................................................................................3 Interpreting and Developing the Law .........................................................................5 Funding Presidential Elections ...................................................................................5 Section 1.B: FEC Performance Goals, Objectives and Results .......................................................6 Sources of Funds ........................................................................................................6 Personnel vs. Non-Personnel Costs .............................................................................6 Summary of Signifi cant Performance Results ..............................................................7 Highlights of Performance Measures ..........................................................................8 Section 1.C: Analysis of FEC's Systems, Controls, and Legal Compliance ..................................10 Balance Sheet ...........................................................................................................10 Statement of Net Cost ..............................................................................................10 Statement of Changes in Net Position ......................................................................11 Statement of Budgetary Resources ............................................................................11 Statement of Custodial Activity ................................................................................11 Section 1.D: Analysis of FEC’s Systems, Controls and Legal Compliance .................................................................................................12 1.D.i – Management Assurances ..............................................................................12 1.D.ii – Management’s Response to the Inspector General’s Management and Performance Challenges .......................................................................15 1.D.iii – FEC Integrated Internal Control Framework and Legal Compliance .........16 Section 1.E: Possible Future Eff ects of Existing Events and Conditions ......................................17 Section 1.F: Other Management Information, Initiatives and Issues ..........................................17 e-Review ...................................................................................................................17 Website Improvement ..............................................................................................17 Campaign Finance Map Enhancements ..................................................................18 Enterprise Content Management System .................................................................18 System Certifi cation and Accreditation Program ......................................................18 Data Warehouse .......................................................................................................18 Section 1.G: Limitations of the Financial Statements ..................................................................19 (cont.) i SECTION II: PERFORMANCE REPORT .............................................................................................21 Performance Purposes, Objectives and Results ............................................................................21 Strategic Goal and Objectives for FY 2009 ..................................................................................21 Results by Objective ....................................................................................................................22 Objective A: Transparency – Receiving Accurate and Complete Campaign Finance Disclosure Reports and Making Th em Available to the Public .................................22 Objective B: Compliance – Education and Enforcement .................................................25 Objective C: Development of the Law – Interpreting and Administering the Act ............29 SECTION III: AUDITOR'S REPORT AND FINANCIAL STATEMENTS .........................................33 Message From Th e Chief Financial Offi cer ..................................................................................33 OIG Transmittal Letter ...............................................................................................................34 Independent Auditor's Report .....................................................................................................37 Financial Statements ....................................................................................................................72 Notes to the Financial Statements ...............................................................................................77 SECTION IV: OTHER ACCOMPANYING INFORMATION .............................................................89 Inspector General Statement on the FEC's Management and Performance Challenges ..............89 APPENDIX A: LIST OF ACRONYMS .................................................................................................101 ii Federal Election Commission Performance and Accountability Report 2009 FEDERAL ELECTION COMMISSION WASHINGTON, D.C. 20463 OFFICE OF THE CHAIRMAN MESSAGE FROM THE CHAIRMAN November 13, 2009 I am pleased to present the Performance and Accountability Report (PAR) of the Federal Election Commission for Fiscal Year (FY) 2009. Th e Commission has received an unqualifi ed opinion from its independent auditors on the Agency’s FY 2009 annual fi nancial statements. Th is unqualifi ed opinion refl ects a successful eff ort and commitment by the Commissioners and the FEC staff to ensure that the Commission’s fi nancial statements fairly and accurately present its fi scal position. Th roughout the 34-year history of the Federal Election Commission, the Agency has devoted considerable resources toward encouraging voluntary compliance with the federal campaign fi nance laws. Compliance with those laws inspires citizen confi dence in the electoral process and in those persons we elect to represent us in government. Th e 2008 election cycle, which closed in the fi rst months of FY 2009, resulted in dramatic increases in campaign fi nance activity. During this cycle, the Commission received and processed, and timely and accurately disclosed to the public, the equivalent of nearly 12 million pages of fi nancial reports. eseTh reports disclosed approximately $8.4 billion in raised funds resulting in a record-breaking 32 million separate receipts and expenditures. During this recent election cycle, the Commission was challenged with the advent of new uses of the Internet, new ways of funding campaigns, and an explosion in the number of contributors. Despite these unprecedented circumstances, the Commission provided thorough and full public disclosure and diligent review of campaign fi nance reports in a timely manner. Th e Commissioners are mindful that the transactions and reports requiring disclosure will continue to increase in number and complexity, and that the Commission must remain vigilant in exploring new and better ways to fulfi ll its mission. Th is year marked a dramatic step forward in that regard. Th is year, the Commission conducted a full-scale reexamination of its policies, practices and procedures, an initiative commenced by the Commission in the fall of 2008 during the term of the previous Chairman, Donald F. McGahn II. Th is review included a notice in the Federal Register published in the fall of 2008 asking for public feedback on how well the Commission had been fulfi lling its mission, and more importantly, how the Commission can improve going forward. Th e Commission invited public comment iii and held two days of public hearings on ways in which the Commission can make its processes more transparent, fairer, and more effi cient. Th is exercise was the most sweeping inquiry into our responsibilities in those areas since the inception of the Agency. Th e Agency received numerous thoughtful, knowledgeable, and persuasive written and oral comments. Th ese comments have already led to several new initiatives, including the adoption of a new audit hearing process, modifi cations of the Commission’s procedures for consideration of