With regards to this Illinois State Board of Elections (Board) requirement, the term “audit” is an undefined statutory term other than the guidance and criteria outlined in paragraphs e and f of the above-cited administrative rules. The statute’s use of the term “audit” for this purpose is inconsistent with accounting standards and the assurance that attaches with the standards.

In consultation with the Board, it is the Illinois CPA Society’s interpretation that the ISBE requirement is tantamount to “other attest engagements outlined in Section 8.05(a)(2) of the Illinois Public Accounting Act (225 ILCS 8.05).

In complying with random selection of political committee audits, the Board is looking for a good faith effort of compliance. CPAs should closely follow the guidance outlined in paragraphs e and f of the administrative rules and include that information in the reported to be submitted to the Board.

By the use of the undefined statutory term of “audit” for this requirement, the Board is not looking for assurance that would normally attach to an audit in accordance with audit standards. Rather, the Board is receptive to a wide range of submissions; the greater the number of transactions (by the dozens), the more detail and information that should be included in the report.

If the Board requires additional information after the initial report submission, they will notify the political committee of the information they require to satisfy the statutory requirement. As long as the political committee has made a good faith effort of compliance of the random audit by filing a report, the Board will not impose a fine on the committee if it is determined that additional information may be required.

Questions should be directed to either Mr. John Levin or Tom Newman of the State Board of Elections at 217.782.4141.

Citations

Illinois Election Code (10ILCS 5/9-13)

Illinois Administrative Code, Title 26, Sect. 100.175

Illinois Public Accounting Act (225 ILCS 450/8.05)

Summary of Section 5/9-13(c):  

Committees randomly selected for audit will be required to conduct an audit if it was required to file at least one quarterly report during the period to be covered by the audit and has a fund balance of $10,000 or more at close of the most recent closing period.

• An average closing fund balance of $10,000 or more on quarterly reports occurring during the two-year period to be covered by the audit; or

• Average total receipts of $10,000 or more on quarterly reports occurring during the two-year period to be covered by the audit;

• Notwithstanding any other provision of this subsection, a political committee owing unpaid fines at the time of its random selection shall be ordered to conduct an audit.

We wanted to call these changes to your attention with this legislative update. The ICPAS Government Relations office will work with the Illinois State Board of Elections on the implementation of these new requirements.

ICPAS GOVERNMENT RELATIONS

217.789.7914

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*NOTE: Section 5/9 of the Illinois Election Code does not specifically define the term “audit” which necessitated drafting the June 2015 Regulatory Bulletin as guidance for CPA’s performing a campaign committee audit.