Transition Your Candidate Committee Reporting
Starting with the first day in office as an elected official, there are modifications to reporting if “Incidental Disbursements” are made for a Candidate Committee. These adjustments impact only the expense side of committee reporting (“income” reporting remains the same). To avoid Error & Omission notices it is important to understand the difference between “expenditures” and “disbursements.”
There are two main expense-related reporting categories once a candidate is in office:
- Expenditures made to further the candidates nomination or election
- Disbursements made as part of carrying out the duties as an elected official
Recording And Reporting Expenditures & Disbursements
Expenditures are defined by the Michigan Campaign Finance Act (MCFA) as anything of monetary value spent by the Candidate Committee to influence the nomination or election of the candidate; the expenditure must tangibly benefit the candidate’s nomination or election effort.
Expenditures are reported on schedule 1B.
Incidental Expense Disbursements (Officeholders Only) are defined as an expenditure that is an ordinary and necessary expense incurred in carrying out the business of an elective office. The Candidate Committee account of a candidate who is holding office may be used to make disbursements to pay for expenses that are incidental to holding that office.
Incidental Office Expense Disbursements are reported on Schedule 1C.
Examples of Expenditures
- Print, radio, web or media advertisements that expressly advocate for the election or nomination of the candidate
- Mailing and postage costs related to the election or nomination of the candidate
- Consultants, campaign staff
Just a few examples for reference, the main focus here is the addition of the Incidental Disbursement schedule.
Categories of Incidental Expenses/Disbursements
The following is a listing by Elections of some of the incidental expenses for which disbursements may be made:
- A disbursement necessary to assist, serve, or communicatewith a constituent
- A purchase for office furniture, equipment and supplies
- A district office if the office is not used for campaign‐ related activity
- A disbursement for the public official or his or her staff, or both, to attend a conference, meeting, reception, or similar event
- A disbursement to maintain a publicly owned residence or temporary residence at the seat of government.
- An otherwise un‐reimbursed expense for travel, lodging, meals or other expenses incurred by the public official (may also include a member of the public official’s immediate family or staff in carrying out the business of the elective office)
- A donation to a tax‐exempt, charitable organization, including the purchase of tickets to charitable or civic events
- A disbursement to a ballot question committee
- A purchase of tickets to another Candidate Committee’s fund raiser, not to exceed $100.00 per Candidate Committee per calendar year (to be used by the candidate whose committee is making the purchase, or by members of his or her immediate family or his or her staff)
- An educational course or seminar that maintains or improves skills employed by the public official in carrying out the business of the elective office
- A purchase of advertisements in testimonials, program books, souvenir books, or other publications if the advertisement does not support or oppose the nomination or election of a candidate
- A disbursement for consultation, research, polling, and photographic services not related to a campaign
- A fee paid to a fraternal, veteran, or other service organization
- A fee for accounting, professional, or administrative services for the Candidate Committee of the public official
- A tax liability incurred by the committee as a result of authorized transactions by the Candidate Committee of the public official.
- A debt or obligation incurred by the candidate committee of a public official for a disbursement authorized by one of the incidental expense subdivisions of the Act.
Other Reportable Expenses
A Candidate Committee may not make expenditures over $50.01 in cash. A written instrument such as a check, money order or credit card must make all expenditures of $50.01 or more. All petty cash expenses must be reported using the relevant category (Expenditure/Disbursement).
In‐kind expenditures are goods, services and facilities donated at no cost. The value of an in‐kind expenditure is the fair market value or usual rental charge of the good, service or facility. In-kind expenditures must be reported under the relevant category (Expenditure/Disbursement).
Expenditure Record Keeping
The committee treasurer/record keeper must keep records and report all expenditures by including the amount, date made, purpose, and the name and address of the individual or business that received the funds. If recording a reimbursement for purchases made on the committees behalf, memo itemizations must be recorded.
This column is provided as general information and not as legal advice. Content is intended to serve only as a guide. Every filing situation is different and you should contact the Bureau of Elections with questions or for more information see https://www.michigan.gov/sos/0,4670,7-127-1633_8723—,00.html or consult with your attorney.
Lisa Farnum, MPP is President of L Farnum, Incorporated. L Farnum, Inc. is a firm that specializes in PAC & Lobby compliance, research and association management. Lisa has been helping clients resolve campaign finance issues and maintain compliance for more than 17 years. She earned a Bachelor of Arts in Business Administration from Northwood University and a Master of Public Policy from the University of Michigan, Dearborn. Ms. Farnum has over 25 years of experience in business and association management.