Audit of the State Election Campaign Fund — Office of Campaign and Political Finance Overview of Audited Entity

This section describes the makeup and responsibilities of the State Election Campaign Fund — Office of Campaign and Political Finance.

Overview

The State Election Campaign Fund (SECF), established by Chapter 774 of the Acts of 1975 and codified in Sections 42 through 45 of Chapter 10 of the Massachusetts General Laws, was created to provide limited public financing for candidates seeking statewide offices. Candidates may receive funding amounts based on the statewide offices they seek in accordance with Sections 4 through 7 of Chapter 55C of the General Laws. For the 2022 statewide election, the SECF distributed $530,270 to qualifying candidates seeking the office of Lieutenant Governor or Attorney General, as detailed later in this section.

Section 42 of Chapter 10 of the General Laws states, “The State Election Campaign Fund [consists] of all revenues received under section 6C of chapter 62, and all other monies credited or transferred to the fund from any other fund or source pursuant to law.”

The SECF’s principal source of revenue is voluntary contributions by individuals filing state income tax returns. Sections 46 and 47 of Chapter 43 of the Acts of 1994 amended prior legislation, as of the tax year that ended December 31, 1994, to state that these taxpayer contributions would no longer increase the amount of state tax owed or reduce tax refunds, a provision similar to those of the federal tax system.

The fund name and provisions have changed several times since its inception. The passage of a ballot question on November 3, 1998 enacted Chapter 395 of the Acts of 1998, changing the name of the SECF to the Massachusetts Clean Elections Fund and repealed Sections 43 through 45 of Chapter 10 of the General Laws. The 2002 statewide election financing was processed under the Massachusetts Clean Elections Fund laws with a new Section 42 of Chapter 10 of the General Laws, which implemented new responsibilities for the director of the Office of Campaign and Political Finance (OCPF), new public-funding requirements for candidates, and new guidelines for the distribution and use of the funds.

Chapter 26 of the Acts of 2003, effective July 1, 2003, repealed the Massachusetts Clean Elections Fund laws. The law rescinded the name change, repealed Chapter 55A of the General Laws, inserted a new Chapter 55C of the General Laws, and amended Chapter 10 of the General Laws to include Sections 42 and 42A through 42C.

Although the enabling legislation did not specify principal oversight and maintenance responsibilities for the fund, four agencies share responsibility for the SECF, as follows.

• Department of Revenue (DOR): Each month, this department reports to the Office of the Comptroller of the Commonwealth (CTR) the total taxpayer contributions through an interface in the Massachusetts Management Accounting and Reporting System (MMARS) so that the SECF is properly credited (see Appendix B).
• CTR: Section 42A of Chapter 10 of the General Laws requires CTR to certify the SECF balance available for disbursement to political candidates as of June 30 each statewide election year. The funds are then divided: 50% is allocated to the primary election account and 50% to the statewide election account. The funds are further subdivided into candidate accounts for candidates for statewide office who have been certified by the director of OCPF as qualified to receive public financing.
• Office of the State Treasurer and Receiver General (OST): As the custodian of funds, OST is required by Section 42 of Chapter 10 of the General Laws to deposit them as follows:

In accordance with sections 34 and 34A of chapter 29 in such manner as will secure the highest interest rate available consistent with safety of the fund and with the requirement that all amounts on deposit be available for immediate withdrawal at any time after June 30 in any year in which elections are held for statewide elective office.

OST also distributes amounts certified by the director of OCPF to the candidates.

• OCPF: Sections 3 and 4 of Chapter 55C of the General Laws establish specific responsibilities for the director of OCPF, including (1) reviewing and certifying candidates’ eligibility, including their lists of qualifying contributions, statements of expenditure limits, bonds posted, and amounts of public financing to be received; (2) prescribing filing and eligibility requirements for candidates; (3) establishing guidelines for distributions to candidates; (4) establishing candidate expenditure limits and matching fund requirements; and (5) preparing and submitting a report related to fund matters on or before January 30 any year after a year in which elections are held for statewide office.

The SECF is processed in MMARS using DOR’s monthly investment income information.

For the 2022 statewide election, as of June 30, 2022, SECF activity included the following:

Amount Certified by CTR as Available for Distribution	$ 1,005,711
Net Amount Certified and Distributed by OCPF to Candidates	(530,270)
Remaining Amount Certified by CTR as Available / Not Distributed to Candidates	$  475,441

In accordance with Section 42A of Chapter 10 of the General Laws, because no candidates for Governor were certified by OCPF to receive public funding, candidates for other offices who chose to participate in the public finance program received public financing, candidates for Lieutenant Governor and Attorney General were eligible to receive funds from the SECF. The funds were distributed as follows.

Candidate	Election	Amount
Tami Gouveia3	Lieutenant Governor, primary election	$ 183,191
Quentin Palfrey	Attorney General, primary election	$ 245,873
James McMahon	Attorney General, general election	$ 101,206
Total Disbursed		$ 530,270

As of December 31, 2022, the SECF had a balance of $517,461 for use in the 2026 statewide election (see Appendix C).

3.    Generally accepted government auditing standards require that audit organizations be free from organizational impairments to independence with respect to the entities they audit. Therefore, the Office of the State Auditor requested that CTR conduct an audit of those accounts and transactions for one Lieutenant Governor candidate for the primary election who is now an employee at the Office of the State Auditor. (See the “Work Performed by CTR” section of this report.)

Date published:	March 31, 2023