How to read a campaign finance report the way an auditor would

Cable television will tell you who is winning the money race in about nine seconds, with a graphic and a man in a blazer. The actual answer sits in a public document that anyone can read for free, in an evening, with a cup of coffee and no blazer. It is the campaign finance report, and it is the most underused tool a voter has.

I like these reports for the same reason I like a good bank statement. They do not care about the spin. A campaign can tell you it is "powered by grassroots energy" and a report can quietly show that most of the money came from a handful of donors. A committee can announce a record haul and the same report will show it spent most of it on raising the next haul. This walkthrough takes you through a federal report line by line, so that you read it the way an auditor would: calmly, in order, and with a calculator. I will not quote any current figures. The point is the method, and the method works on every report ever filed.

Why bother reading the report yourself

Here is the objection, stated fairly. Reports are long, they use jargon, and there are professional reporters and watchdog groups who read them for a living. Why not let them do it?

Because the filter is the problem. A summary from an outside group is written to make a point, and it will pick the number that proves it. When you read the source, you can tell when a headline is fair and when it is a stretch, whichever side it favors. A conservative who wants to know whether a favorite candidate is a grassroots darling or a creature of a few big donors can find out in ten minutes. So can anyone who wants to check whether an opponent's accusations are true.

You also learn how the campaign thinks. What a campaign spends money on is the closest thing to a confession it will ever file.

Step 1: Find the committee on fec.gov

Every federal candidate has at least one committee, called the principal campaign committee, and every PAC and party committee has its own. All of them file with the Federal Election Commission, and the filings are public on the commission's website, fec.gov.

1. Go to fec.gov and use the search for candidates or committees. Type the candidate's name or the committee's name.
2. Open the candidate's page. It lists the candidate's ID (candidates for the House start with an H, the Senate with an S, and president with a P) and the committees tied to the candidate. Committee IDs start with a C.
3. Open the committee page. Look for the summary of money raised and spent, and the list of filings.

For a state or local candidate, the same data lives on the website of your state's election or campaign finance agency. Reporting rules, thresholds and deadlines vary, so check them there.

Step 2: Know which report you are reading

Not every report covers the same stretch of time, and comparing the wrong two is the most common mistake.

Federal committees file different kinds of reports on a schedule:

• Regular reports, quarterly in an election year for most candidate committees, with extra reports before and after elections. PACs and party committees may be monthly or quarterly filers. In a year without an election, the schedule is lighter.
• Pre-election and post-election reports, which cover the days around a primary or a general election.
• The year-end report, which closes out the books.
• Special notices. When a group spends a large amount on independent expenditures near an election, it must report quickly, in 24-hour or 48-hour notices. The dollar thresholds and the dates are on the FEC's website.

Every report states a coverage period, the first and last day it covers. Read that first. A report for the quarter that ended in June and a report for the full two-year cycle are not the same size, and an unwary reader can mistake one for the other.

The FEC publishes a calendar of reporting deadlines by year. Use it to find out which reports a given committee owes and when, so you can tell when a missing report is a problem and when it is not due yet.

The forms are also worth knowing by name. House and Senate candidate committees use Form 3. Presidential committees use Form 3P. PACs and party committees use Form 3X. You do not have to memorize them. The FEC page shows them in the filing list.

Step 3: Read the summary page first

Every report starts with a summary page. Read it before you read anything else. It has three columns of use to you:

• This period, covering the coverage period of this report.
• Calendar year or election cycle to date, covering the longer stretch.
• The line items, such as total receipts, total disbursements, cash on hand at the beginning and at the end.

The first thing an auditor does is the simplest: check that the arithmetic closes.

Beginning cash plus receipts minus disbursements equals ending cash.

Here is a hypothetical to show you. Numbers invented.

• Cash at the start of the period: $12,000.
• Total receipts: $30,500.
• Total disbursements: $27,250.
• Cash at the end: 12,000 plus 30,500 minus 27,250.

12,000 plus 30,500 equals 42,500. 42,500 minus 27,250 equals 15,250.

If the report says the ending cash is $15,250, it closes. If it does not, there is an explanation in the report, such as a correction, a loan, or an item reported in a later period, or there is a mistake that the committee should amend. A good habit is to look at the filing list for an amended report. Committees correct mistakes by filing an amendment, and the newest version supersedes the earlier one.

Step 4: Read the receipts

Receipts are what came in. Break them down by source, using the same hypothetical:

Check: 19,800 plus 4,700 equals 24,500. 24,500 plus 2,000 equals 26,500. 26,500 plus 4,000 equals 30,500.

Now ask what each row means.

Itemized versus unitemized. Federal committees must list by name, address, occupation and employer any individual whose contributions add up to more than $200. For a candidate's committee the count runs across the election cycle, and the FEC explains the period used for other committees. Those are the itemized contributions. Smaller gifts are reported only as a lump sum, the unitemized total. Many people read the unitemized line as a count of small donors. It is a hint, not a count, because one person can give many small gifts that add up past the threshold, and then they appear in the itemized column.

In the hypothetical, unitemized money is 4,700 divided by the total from individuals, which is 19,800 plus 4,700, or 24,500. 4,700 divided by 24,500 is about 0.192, or 19 percent. A campaign that says it is "funded by small donors" has to be able to point to something like a large share of money in that column, and the report will show it.

Other committees. PAC and party money is easy to find and often tells you who a candidate's allies are.

Candidate loans and contributions. A candidate who puts in their own money is a signal of commitment. A candidate loan is also a debt the campaign may owe the candidate. In the hypothetical, 4,000 divided by 30,500 is about 0.131, or 13 percent of all receipts. Ask whether the loan is to be repaid, and from what. The FEC explains the rules on repaying candidate loans, and they have changed through litigation, so read the current guidance.

Online platforms. Many small gifts arrive through online processing platforms. They appear in the report as contributions earmarked through a conduit, with the conduit named. Do not confuse a conduit with a donor. The donor is the person whose name is on the line.

Memo entries. Some lines are marked as memo items. They are there to explain another line, not to be added a second time. If you add the memo lines you will count some money twice.

Step 5: Read the disbursements

Disbursements are what went out. This is where the campaign shows its priorities.

Here are the hypothetical disbursements, totalling $27,250:

Check: 12,400 plus 6,000 equals 18,400. 18,400 plus 5,850 equals 24,250. 24,250 plus 1,500 equals 25,750. 25,750 plus 1,500 equals 27,250.

Media is 12,400 divided by 27,250, which is about 0.455, so about 46 percent of spending. Consulting is 6,000 divided by 27,250, about 0.220, or 22 percent.

Now read the line items, not the categories. Each disbursement shows who was paid, the date, the amount and the purpose. Look for:

• Vague purposes. "Strategy consulting" or "services" tells you nothing. The FEC expects a purpose clear enough that a reader can understand what the money bought. A report full of vague descriptions is a flag worth a question, not a conviction.
• Repeated payments to the same vendor, especially a vendor the candidate or a relative owns or controls. Federal law bars using campaign funds for personal use, and it is public information when payments go to relatives or insiders.
• Fundraising costs that eat a large part of what the fundraising brings in.
• Payments to the same few firms for consulting, mail and digital, all of which may be owned by one operation.

None of these proves wrongdoing. They are questions. An auditor does not accuse; an auditor asks, and then checks the answer.

Step 6: Cash on hand and debts

At the bottom of the summary you will find cash on hand and debts and obligations.

Cash on hand is what the campaign has in the bank. Read it as a fuel gauge, but in context. A campaign with a lot of cash on hand weeks before an election is saving for a final push, or hoarding. A campaign with little cash on hand and a rate of spending that outruns its fundraising is a campaign in trouble. Divide the cash by the spending in the last period to see how long it lasts. In the hypothetical: 15,250 divided by 27,250 is about 0.56, so the campaign has a bit more than half a period of cash at the current rate of spending.

Debts appear on their own schedules. Schedule C lists loans and Schedule D lists debts and obligations, money owed to vendors and others. A campaign that owes a lot to the same vendors that it keeps hiring deserves a closer look. A candidate who is owed money by the campaign is also a creditor, which is a fact you want to know.

Step 7: Compare over time

A single report is a photograph. A series is a film. Open the committee's last three or four reports and compare:

1. Is the share of unitemized money rising or falling?
2. Is the candidate's own money growing?
3. Are the same donors giving again?
4. Is spending moving toward the election, or toward fundraising and overhead?
5. Is there a pattern of late debts?

The FEC site has charts for the main categories over time. Use them as a starting point and go back to the report for the details.

The skeptical voter's questions

Here are ten questions to ask of any report, for any candidate on any side.

1. Does the report close? (Beginning cash plus receipts minus disbursements.)
2. What share of individual money is unitemized?
3. How much came from the candidate?
4. How much came from PACs and party committees?
5. What do the largest itemized donors do for a living? The occupation and employer fields are public.
6. What share of spending went to ads, mail and field work, and what share to fundraising and overhead?
7. Are the purposes of payments specific?
8. Who gets paid repeatedly?
9. What does the campaign owe, and to whom?
10. Does the way the money is spent match what the candidate says in public?

This is the check that counts. The report shows what the campaign does, and the campaign tells you what it says. When the two match, you have a candidate with integrity. When they do not, you have your answer.

Using this at home

If your favorite candidate is a Republican, run the checklist on them first. A movement that expects to hold others to account has to be willing to read its own side's books. For the legal background, see How campaign finance law works, and why you should check the FEC for the numbers. If you plan to run for office, you will be the one filing a report, and the budget in a campaign budget worksheet for the candidate with no money and no staff and the guest-and-money rules in hosting a candidate in your living room without breaking the law show how the lines get their numbers. And if you want the other side of the ledger, the way candidates raise those dollars, read the fundraising call sheet, how a first-time candidate asks for money.

The bottom line

• Read the primary source. Search for the committee on fec.gov, note the coverage period, and start with the summary page.
• Check that the arithmetic closes, then break receipts into itemized, unitemized, committee money and candidate loans, and ask what each mix tells you.
• Read the line items in the disbursements for specific purposes, repeated payees and spending on fundraising, and treat odd entries as questions, not accusations.
• Compare several reports over time, and look at cash on hand and debts, not just totals raised.
• Apply the same test to every candidate and every group, your own side included. A movement that wants honest government should be the first to read its own books.