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FPPC audit recommends simpler thresholds, direct‑cost disclosure for nonprofit‑funded official travel
Summary
An FPPC discretionary audit of Form 807, the nonprofit travel disclosure form, found the current 1/3 expense threshold and multiple numeric triggers impede public transparency and recommended a flat monetary threshold, disclosure of direct costs, and expanding who must file.
The Fair Political Practices Commission received an audit Feb. 13 that evaluated whether nonprofit organizations are complying with Form 807 requirements to disclose donors who fund travel for state and local elected officials. The audit, performed by the FPPC’s Audits and Assistance Division, concluded the current statutory and regulatory thresholds are difficult to apply in practice and recommended legislative changes to simplify disclosure rules.
Auditors reviewed 2021–2022 filings disclosed on officials’ Form 700s and selected 10 organizations with high reported travel‑related expenses for deeper testing. The team requested IRS Form 990s, source documentation for travel expenses (invoices, receipts, contracts, credit‑card records), and supporting schedules. Audit staff reported several practical obstacles: many organizations failed to produce requested records or supplied incomplete documentation; indirect costs and broad ‘management and general’ categories on 990s made it difficult to trace which expenses were travel‑related; and some organizations produced internal spreadsheets rather than original invoices.
The audit findings included that audited 501(c)(3) and 501(c)(4) entities did not meet the one‑third total‑expense threshold that triggers Form 807 filing under current rules; results for 501(c)(6) organizations were inconclusive because staff could not obtain necessary documents. Based on its fieldwork, the audit recommended that the Legislature replace the current percentage and layered monetary triggers (for example, $10,000 and $5,000 per official) with a single flat monetary threshold to prompt Form 807 filing, require organizations to disclose direct travel costs (hotels, airfare, ground transportation, per‑diem advances and reimbursements), and consider expanding who must file Form 807.
Audits Chief Shraddha Shah told the commission the audit encountered noncooperation that lengthened field work and required subpoenas for some records. Commissioners urged staff to consult with stakeholders, including nonprofit trade groups, to select an appropriate flat threshold and to consider the burden on smaller organizations that lack formal accounting systems. Commissioners also emphasized the public interest in transparent donor disclosure for travel that could influence official decision‑making.
Staff recommended pursuing legislative changes to clarify thresholds and disclosure requirements and to improve the form and administrative processes so the FPPC and public can better verify compliance.
