California Democratic Party Needs Structure for Financial Transparency and Accountability

The U.S._Securities_and_Exchange_Commission" (SEC) first recommended that publicly held companies establish audit committees in 1972. The stock exchanges quickly followed by either requiring or recommending that companies establish audit committees. Over the years, various initiatives to strengthen and increase the responsibilities of audit committees have been made.

In 2002, the Sarbanes-Oxley Act increased audit committees’ responsibilities and authority, and raised membership requirements and committee composition to include more independent directors. In response, the SEC and the stock exchanges proposed new regulations and rules to strengthen Audit Committees.

Financial audits provide reasonable assurance about whether the financial statements of an entity present fairly the financial position and results of operations in conformity with U. S. generally accepted accounting principles. The objective of a financial performance audit is to provide an independent assessment of the entity’s compliance with certain laws and procedures, and to: inform the stakeholders concerning the expenditure of the organization’s funds; ensure that organization funds are expended only for the purposes described in it’s ByLaws, and in conformity with its approved operating budget; ensure that no funds are used for any other purpose; and that disbursements are engaged at arms’ length transactions without conflict of interest.

Financial Transparency and Accountability Resolution

Recommendation to California Democratic Party for the Forming of a Standing Audit Committee

RESOLUTION

WHEREAS, the California Democratic Party (“CDP” or “the Party”) is committed to winning elections at every level in every region of the State;
WHEREAS, the strategic allocation of revenues is the means by which the Party can succeed in electing Democratic candidates and realizing its goals, including building the membership, supporting member-approved actions and the activities of candidates endorsed by the Party; and
WHEREAS, transparency and accountability in the conduct of the financial compliance activities of the Party, required by the Bipartisan Campaign Reform Act of 2002 (BCRA) and the setting of sound financial management and performance policies in support thereof, are prudent;
THEREFORE, BE IT RESOLVED, that in order to provide financial transparency and accountability and in order to assess whether the Party is achieving economy, efficiency and effectiveness in the employment of its available resources and to ensure that best accounting practices are followed, an Audit Committee comprised of elected representatives from each region shall be established through the procedures of the Rules Committee.
BE IT FURTHER RESOLVED, that in order for the principles of financial transparency and accountability to conform to the governance of the Party, the Bylaws shall be amended to include the Audit Committee as an additional standing committee with the duty to review the party’s Operating Budget, all its receipts and expenditures, to report its findings to the Executive Board and, in summary form, to the Annual Convention, and to verify whether or not action has been taken on recommendations from prior reports.

Ralph Miller, 6th AD Delegate to the CDP Convention, is a member of the Progressive and Hispanic caucuses of the California Democratic Party and has been working with Marin-DFA Democratic Club members to coordinate the Audit Committee campaign at the convention. Ralph is Executive Director of Latinos for America (a spin off from Latinos for Dean) and on the board of CA for Democracy. He is a dedicated progressive who wants to grow the CDP and help make the party relevant to members and voters.