Recordkeeping

Record retention

Lobbyists, their employers and public agencies engaged in lobbying must preserve all accounts, bills, receipts, books, papers and other documents that substantiate their reports for five years. If the lobbyist is required, as part of his or her employment agreement, to turn all records over to the employer, the employer has the responsibility to preserve them for five years. [RCW 42.17A.655(1)]

Recordkeeping for lobbyists and their employers

The financial reports required from lobbyists and employers mandate that complete, accurate and detailed records be maintained. The type of information that needs to be reported is often both greater and different from that found in most financial accounting systems or required by the Internal Revenue Service. For these reasons, a careful study should be made of the reporting requirements to ensure that the record keeping system used will enable both the lobbyist and employer to prepare and substantiate their respective expense reports.

Given the variety of lobbyists, lobbyist employers and the resources available to them, it is not feasible to suggest a uniform bookkeeping system. Lobbyists and employers must examine their own planned activities and devise a system that is compatible with their other financial accounting requirements, while still satisfying the PDC reporting requirements. Below are some hints and suggestions to assist in record keeping.

Tips for Success:

• Report all compensation and expenses on an accrual basis. That is, report them for the month in which they were earned or incurred, not necessarily received or paid.
• Lobbying reports cover a calendar month and lobbyist employer reports cover a calendar year. Books should be established, expense accounts submitted and, where possible, arrangements made with vendors for billing to cover a similar period.
• Records substantiating reports must be kept for five years from the file date of the report.
• Separate accounts, subsidiary ledgers or a similar system to segregate or identify expenses for lobbying from other expenses should be established. PDC recommends a separate bank account; separate credit cards for lobbyist purchases, identification on expense vouchers (or separate vouchers) for lobbying expenses and other discrete identification of expenses for lobbying.
• Keep receipts for all purchases. Annotate receipts with the date of purchase, purpose and persons in the party. Many credit card charge slips provide space for this information.
• Keep a record of time spent lobbying. This is especially important for those who lobby part-time in addition to performing other duties for the employer, as well as for those lobbyists who have more than one employer.
• Have one person in the lobbying organization who is the focal point for gathering financial data for lobbying reports. In small organizations, this person may be the lobbyist. In larger firms, it will usually be the accountant who reviews expense accounts or travel claims and vouchers.
• Personnel officers and purchasing agents (as well as the accounting department) of lobbyists and their employers must be alert to the requirement to report employment or business relationships with elected officials, state employees, their families, and firms in which those individuals are officers, directors or major stockholders. Many lobbyists and employers include a question on employment applications to assist them in determining whether a relationship will be subsequently reportable. PDC annually publishes a List of Elected Officials that identifies state officials and companies with which they are associated.
• For special or unusual lobbying activities, involve the accountant or other person completing the expenditure reports during the planning stage. In this way, any record keeping and reporting problems can be anticipated and remedied more easily. PDC can often offer suggestions or the lobbyist could request in writing a reporting modification from the Commission.

Recordkeeping for Public Agencies

Each public agency must keep detailed records substantiating the L-5 reports filed by the agency. The records need to document who undertook lobbying activities on behalf of the agency, when and what activities occurred, the specific issues advocated or opposed, as well as the date, amount and purpose of each lobbying-expense. Lobbying-related expenditures of non-public funds totaling $25 or more for gifts or entertainment must also be recorded by date, amount, name of recipient, purpose, source of funds and name of each person making such expenditures.

Report all compensation and expenses for lobbying on an accrual basis. That is, report them for the quarter in which they were earned or incurred, not necessarily received or paid.

It's recommended that agency lobbyists obtain receipts for all lobbying-related expenditures and purchases for which they will be reimbursed by the agency. Similar receipts documenting expenditures of non-public funds for lobbying would also be in order. All receipts should be provided to the agency for its records. Lobbyists should also maintain records of time spent lobbying, persons contacted and issues discussed. Agencies will not be able to report accurately unless these records exist.

Amending Reports

Regardless of the amount of time and effort devoted to filing a complete and accurate report, mistakes do happen. If an omission or mistake in the figures of a previously filed report is discovered, file an amended report through the PDC's e-filing application. If an oversight was made in the description of lobbying activities or elsewhere in the text of the report, submit a letter of explanation rather than filing a complete, amended report. Amended reports should be filed as soon as the error is discovered.