Welcome Election Funds Management 2016 Working with SOS 17th Biennial Election Law Seminar for County Chairs October 9, th County Chair SeminarTexas Secretary of State Elections Division1

Primary Finance Staff Dan Glotzer, EFM, Amanda Grossman, Mary Eliasen, Option (direct) 17th County Chair SeminarTexas Secretary of State Elections Division 2

WORKING WITH THE SECRETARY OF STATE 17th County Chair SeminarTexas Secretary of State Elections Division 3

Setting Up the Primary Fund The first step to managing a primary fund is to obtain a Federal Employer Identification Number “EIN”. EIN’s are used by the IRS to identify taxpayers that are required to file various business tax forms. It is important to obtain the existing EIN. – Inquire with the prior county chair or the SOS. – Check the files from the previous primaries for tax returns, copies of W-2’s, bank statements, etc... 17th County Chair SeminarTexas Secretary of State Elections Division 4

Setting Up the Primary Fund (cont.) The new county chair is required to send in a change of officer letter to inform the IRS: – Internal Revenue Service Attn: EIN Operation Cincinnati, OH Fax-TIN: (859) If you do not have an EIN, you can access a Form SS-4 (Application for Employer Identification Number) at or apply online at You can obtain additional information by calling the IRS toll- free th County Chair SeminarTexas Secretary of State Elections Division 5

Setting Up the Primary Fund (cont.) If one does not already exist, a bank account must be set up exclusively for the primary fund. Use the EIN number, not your social security number, to open the account. 17th County Chair SeminarTexas Secretary of State Elections Division 6

Setting Up the Primary Fund (cont.) The account should be styled “______ County Democratic/Republican Party Primary Fund”. Obtain a sufficient number of deposit slips and checks. – Checks will be issued from the county primary fund to pay all expenses necessary and directly related to the conduct of the primary elections. All primary fund checks must be printed or stamped with the statement on their face “Void After 180 Days”. 17th County Chair SeminarTexas Secretary of State Elections Division 7

Setting Up the Primary Fund (cont.) Expedite payments by completing a direct deposit form, located at – When completing the form, you’ll have to select the Secretary of State from the dropdown menu. You can fax the form to EFM at or scan and it to Although completing the direct deposit form is not required, it is recommended. Submitting this form WILL NOT generate a payment. 17th County Chair SeminarTexas Secretary of State Elections Division 8

Bookkeeping Options Decide on a method for keeping the financial records. Whether using commercial “off the shelf” accounting software or a simple spreadsheet, be sure to categorize the bookkeeping records so they align with the categories in the estimate and final cost reports (e.g. B1 – Ballot Printing Costs). Record the computer serial number and report it to SOS when final cost reports are submitted. 17th County Chair SeminarTexas Secretary of State Elections Division 9

Funding the Primary Elections The SOS prepares “pre-populated” estimates based on 75% of the final approved costs less non-state appropriated financing sources (e.g. filing fees) for the most recent comparable election. The chair has the option to accept the pre-pop or submit a different estimate within the internet-based primary finance system prescribed by SOS. 17th County Chair SeminarTexas Secretary of State Elections Division 10

Funding the Primary Elections (Cont.) The SOS will review amended estimates for compliance with applicable rules and statutes. Chairs will also receive filing fees for local races directly from the candidates and pro rata district and statewide office fees from the state party. No documentation is required when the estimate application is submitted. 17th County Chair SeminarTexas Secretary of State Elections Division 11

Funding the Primary Elections (cont.) After the primary/runoff elections, the chair will submit a final primary election cost report within the SOS online system. The SOS will review the final cost report for compliance with applicable rules and statutes. 17th County Chair SeminarTexas Secretary of State Elections Division 12

Funding the Primary Elections (cont.) The final approved costs are calculated against received revenue: – Estimate fees from the state – Filing fees – Contributions, beginning balance, earned interest, etc. The chair will either be owed additional funds or have “surplus” funds which must be returned to the state. 17th County Chair SeminarTexas Secretary of State Elections Division 13

Contracting with the County County chairs are strongly urged to contract with the county for election services. – You can find your county election official on our website at: The county election officer receives a 10% “general supervision fee” based on the overall contract amount, which is reimbursable with primary funds. 17th County Chair SeminarTexas Secretary of State Elections Division 14

Contracting with the County (cont.) The following county election officer duties are required by statute and may not be included for compensation in an election services contract: – The filing of Title 15 reports – Custodian of election records – Conducting early voting (ballots, including programming, and early voting ballot board expenses are payable from the primary fund) The Secretary of State supplies a “Model Contract” that must be signed by the chair and the county election officer (refer to 1 TAC §81.131). 17th County Chair SeminarTexas Secretary of State Elections Division 15

Contracting with the County (cont.) Examples of contractible items include: – Preparing, programming, and transporting voting equipment – Ordering election supplies – Notification of election judges, arranging polling locations – Operating a central counting station – Preparing justice department submissions – Conducting election schools (compensation to attend and material available through the Secretary of State are not reimbursable) 17th County Chair SeminarTexas Secretary of State Elections Division 16

Contracting with the County (cont.) It is acceptable to forward the estimated costs for contracted items to the county. § of the Texas Election Code provides for direct payment from the SOS to a county of a population of 100,000 or more who conducts a primary election under an election services contract. 17th County Chair SeminarTexas Secretary of State Elections Division 17

Arranging Polling Locations At the earliest time available, the county precinct map should be obtained from the commissioners court along with the list of designated county polling locations. Persons responsible for the sites to be used as polling locations should be contacted, preferably in writing, to arrange for the use of the facilities. 17th County Chair SeminarTexas Secretary of State Elections Division 18

Arranging Polling Locations Referring to previous locations used should provide guidance on the poll rental expenses expected. Charges for use of a public building as a polling place on a day when that building is normally open are not allowed. 17th County Chair SeminarTexas Secretary of State Elections Division 19

Hiring and Paying Election Workers Refer to 1 TAC § for limitations on poll worker costs. The precinct judge is responsible for delivering to the county chair a properly completed and signed Statement of Compensation and Oaths immediately after the polls close on Election Day. These forms are used to calculate the amounts due to each election worker. 17th County Chair SeminarTexas Secretary of State Elections Division 20

Hiring and Paying Election Workers (cont.) A clerk or election judge from each polling location may receive $15 as a delivery fee for picking up and delivering election supplies. – A separate check does not need to be issued for the delivery fee, but a notation should be made on the check stub and bookkeeping records of the delivery payment. Checks for poll workers’ compensation should be prepared, signed by the chair, and mailed to each worker as soon as possible after the election. 17th County Chair SeminarTexas Secretary of State Elections Division 21

Unallowable Costs Costs not necessary or directly related for the conduct of the primary election. Costs related to political activity. Items including but not limited to those listed in 1 TAC § th County Chair SeminarTexas Secretary of State Elections Division 22

Allowable Costs B1 – Ballot Printing B2 – Voting System Programming B3 – Logic & Accuracy Advertisement B4 – Tech Support B5 – Election kits and other precinct supplies B6 – Rental of county owned election equipment (e.g. DRE’s, control booths, tabulators, etc...) 17th County Chair SeminarTexas Secretary of State Elections Division 23

Allowable Costs (cont.) B7 – Rental of non-county owned election equipment (e.g. DRE’s, control booths, tabulators, etc...) B8 – Voting Equipment Transportation B9 – Polling Place Rental Charges 17th County Chair SeminarTexas Secretary of State Elections Division 24

Allowable Costs (cont.) B10 – Precinct Election Judges and Clerks B11 – Election judge delivery fees ($15 per polling location plus one additional fee for the early voting ballot board judge) 17th County Chair SeminarTexas Secretary of State Elections Division 25

Allowable Costs (cont.) B12 – Central Counting Station Manager B13 – Tabulation Supervisor B14 – Asst Tabulation Supervisor B15 – Central Counting Station Judges and Clerks – Presiding judge is paid $8.00 per hour. Station manager, tabulation supervisor, and assistant tabulation supervisor may be compensated at a greater rate not to exceed compensation for comparable work within the county. 17th County Chair SeminarTexas Secretary of State Elections Division 26

Allowable Costs (cont.) B16 – Early voting ballot board personnel ($8.00 per hour) B17 – Provisional and Late Ballot Board ($8.00 per hour) 17th County Chair SeminarTexas Secretary of State Elections Division 27

Allowable Costs (cont.) B18 – Supplies B19 – Communication B20 – Postage B21 – Legal Fees related to a candidate’s name on the ballot B22 – Security B23 – Miscellaneous expenses directly related to the conduct of the primary that do not fit in one of the aforementioned categories 10% Contract Administrative Fee 17th County Chair SeminarTexas Secretary of State Elections Division 28

Allowable Costs (cont.) Administrative Costs: C1 – Office Rent C2 – Office Personnel C3 – Telephone and Utilities C4 – Office Supplies C5 – Miscellaneous C6 – Election Law Book (up to two) C7 – One Computer Purchase (if one was not purchased during the previous primary) 17th County Chair SeminarTexas Secretary of State Elections Division 29 Will not count toward administrative cap.

Paying the Bills The primary funds may be used to pay “only expenses necessary and directly related to the conduct of primary elections.” Checks issued payable to cash or to bearer are prohibited except for the following: – To establish a petty-cash fund – To reimburse the county chair for seminar travel reimbursement – For personal loans to the primary fund to cover eligible expenses approved by the SOS – For county chair compensation consistent with § of this Chapter 17th County Chair SeminarTexas Secretary of State Elections Division 30

Paying the Bills (cont.) The chair is required to authorize all expenditure of primary funds. – That authorization should be evidenced by his or her signature and “ok” on the invoice. – The chair should be sure to maintain a current balance on the primary fund. 17th County Chair SeminarTexas Secretary of State Elections Division 31

Paying the Bills (cont.) The purchase and rental of election supplies and equipment are not subject to sales tax. A copy of the Texas Sales and Use Tax Exemption Certificate must be reproduced for all election related purchases and can be found at Complete all areas of the certificate and present to the vendor. The “purchaser claims this exemption for the following reason” portion of the form should state that items are to used to conduct the __________ county __________ party primary election. 17th County Chair SeminarTexas Secretary of State Elections Division 32

Preparing the Final Primary Election Cost Report The final cost report should be prepared using the bookkeeping system kept by the chair. – Reminder: Be sure to categorize the bookkeeping records so they align with the categories in the estimate and final cost reports (e.g. B1 – Ballot Printing Costs). All expenses will be reported to the SOS using the online primary finance tool. 17th County Chair SeminarTexas Secretary of State Elections Division 33

Preparing the Final Primary Election Cost Report Chairs are encouraged to report expenses and submit supporting documentation to the SOS as costs are incurred. Once all costs have been accounted for in the SOS online system, the chair will mark the report as final. 17th County Chair SeminarTexas Secretary of State Elections Division 34

Preparing the Final Primary Election Cost Report (cont.) Submit the following documentation with the final cost report: – Copies of leases, receipts, bills, invoices, contracts, competitive bids, compensation sheets for election day workers, petty-cash receipts, monthly bank statements, electronic bookkeeping records (i.e. Quicken, QuickBooks, etc.), and any other related materials documenting primary-fund expenditures. Be sure all supporting documents are labeled so SOS can easily verify the reported expense. 17th County Chair SeminarTexas Secretary of State Elections Division 35

Submitting Supporting Documentation “Upload” electronic versions, including scanned documents, when you submit the Final Cost Report online. to Fax to Mail them to: Texas Secretary of State Election Funds Management Section P. O. Box Austin, Texas th County Chair SeminarTexas Secretary of State Elections Division 36

Paying the County Chair’s Compensation A separate warrant will not be issued for the chair’s compensation. The chair shall be paid with a check drawn on the county’s primary fund account. If there is a surplus in the primary fund, the chair’s compensation should be withheld from any refund to the state. The chair forfeits the county chair compensation if the report is not completed by July 1, th County Chair SeminarTexas Secretary of State Elections Division 37

Applicable Payroll Taxes Summary Administrative (Office) Workers – W-2 is required to be furnished regardless of amount paid. – W-4 and I-9 are required to be kept on file for each worker. Election Worker – Exempt from federal income tax. – Social Security and Medicare is withheld and paid by the employer if the worker earns $1600 or more in a calendar year. – W-2 is required ONLY if the worker earns more than $600 in a calendar year. 17th County Chair SeminarTexas Secretary of State Elections Division 38

Applicable Payroll Taxes Summary (cont.) County Chair Compensation – Exempt from federal income tax, Social Security, and Medicare. – I-9 is required if compensation is $600 or more. See “Appendix” A of the Primary Election Financial Management Guide for withholding rates and required quarterly and annual report forms. 17th County Chair SeminarTexas Secretary of State Elections Division 39

Key Primary Finance Dates November 1, 2015: earliest date primary costs may be incurred Early December, 2015: recommended deadline for commissioners court to vote on approval of resolution to conduct a joint election December 22, 2015: deadline to submit candidate filing information December 23, 2015: deadline for state chair to notify county chairs names to be on the ballot have been certified 17th County Chair SeminarTexas Secretary of State Elections Division 40

Key Primary Finance Dates (cont.) January 19, 2016: deadline to file Primary Cost Estimate March 1, 2016: Primary Election March 11, 2016: deadline to file Primary Runoff Cost Estimate March 31, 2016: deadline to file Final Primary Cost Report (if no runoff) 17th County Chair SeminarTexas Secretary of State Elections Division 41

Key Primary Finance Dates (cont.) May 24, 2016: Primary Runoff Election June 23, 2016: deadline to file Final Cost Report (if runoff) June 13, 2016: County Chair term begins July 1, 2016: Primary Account must be reconciled and finalized and surplus returned to the state 17th County Chair SeminarTexas Secretary of State Elections Division 42

Closing Out the Primary Fund All remaining unexpended and uncommitted primary funds must be returned to the Secretary of State by July 1 following the primary elections. After all primary expenditures have been paid, the primary bank account may be kept open with a minimum balance (if required) assuming sufficient funds are available in the primary account. 17th County Chair SeminarTexas Secretary of State Elections Division 43

Transferring Records to New County Chairs Not later than the 30th day after the date the term of office of a new county chair begins, the outgoing county chair shall transfer to the incoming county chair local party bank accounts and original records: – precinct chair and county chair canvass results – candidate applications; – paperwork related to the primary election; and – other documents concerning party affairs. Before transferring records to a new county chair, the person formerly serving as the county chair may make copies of those records. 17th County Chair SeminarTexas Secretary of State Elections Division 44