Hitting the Lottery
Played your numbers right, and now you’ve hit the jackpot. It says so in that letter right there on your desk as you walked into the office Monday morning.
Your to-go coffee cup in hand, cell phone up to your ear talking to the boss, and you pick up the letter from a firm you’ve never heard of - and it’s an accounting firm. You ask your boss, “Have you heard of these people? When did we hire an accounting firm?” And then you open the letter. They don’t want to provide you with their services, they’re inspecting your compliance with the Lobbying Disclosure Act for all of last year.
Then you check your voicemails and find out the auditors called you last week and you haven’t returned their call...because you thought it was a sales call…
Then your assistant forwards you an email from a random company account. It’s a message from the auditors telling you that your company has been selected for an audit. You never really check that email account...and totally missed the message...
Ever wonder how this audit process works?
Every year, the Department of State conducts a lottery. All registrants from the prior year are placed into a hat (of sorts) and 3% are randomly selected for an audit of the prior year’s expense reports, and in many cases, an audit of the registration record too.
The state contracts with a number of firms, typically accounting firms, to perform these audits to determine the compliance of lobbying registrants. The auditors examine the expenses and records on the public database and ask the registrants to provide records of those expenses and account for the process by which the registrant arrived at those numbers.
Long story short, they’re testing the registrant's ability to prove it is not only following the law, but is “reasonably” following a method to ensure total compliance with the registration record and the calculation of the expenses to report publicly.
Don’t you feel lucky?
Have you wondered where registrants tend to falter in the audit process? What trips them up? Where do they go wrong? In some instances it is not something they did intentionally. Many times it’s an innocent mistake or oversight.
Where have we seen common problems? Where do we see issues arise? These are some things that you should review if you have been recently selected for audit:
Registration changes/updates made timely that the website did not save accurately (and the registrant did not document the change).
Registrants do not properly account for all lobbying activity or include all activity on expense reports. (Hint: Your lobbying firm may not be the only one lobbying...more on that in a future post).
Registrants do not properly calculate and document lobbying commencement dates or end affiliation dates.
If you want to be proactive, you could implement a sound compliance plan that will ensure your “victory” before the auditors hit your home turf. The following questions will guide you in that endeavor:
Have you identified everyone within your organization who engages in lobbying activity (direct and/or indirect communication)?
Are you valuing and tracking all lobbying activity? (Look to the definitions of lobbying)
Are you communicating with everyone in a timely manner to document and disclose begin and end affiliation dates?
Are you currently printing/documenting all changes that you are making via the lobbying disclosure website when you make those changes? To paraphrase a famous quote “Pictures don’t lie.”
If all of this sounds far too mind-numbing and time-consuming, contact us. We can be your quarterback and lead you to victory.