Unit 3: Campaign Finance Compliance
for Local Elections
What advice would you give to new candidates about setting up campaign finances?
Helpful Checklists and Links From the FPPC:
The Fundamentals of Campaign Finance Compliance for Local Elections
California’s Political Reform Act was passed to ensure transparency with campaign contributions and expenditures. Compliance with campaign finance rules is not optional, and should be taken very seriously. For local campaigns the rules are detailed in Manual 2 found on the Fair Political Practices Commission website www.fppc.ca.gov.
Getting started
Candidates should know the basics of the law and the rules. Scan Manual 2 to get an overview of campaign rules and to know where to look for detailed information and to find answers when questions arise—as they will. Following are the topics covered in Manual 2:
Chapter 4 – Contribution Restrictions
Chapter 5 – Use of Campaign Funds
Chapter 7 – Advertisement Disclosures
Chapter 8 – Committee Reports (Form 460)
Chapter 9 – When and Where to File Form 460
Chapter 10 – Additional Reports
Chapter 11 – After the Election
While candidates may serve as their own treasurer, it is advisable to obtain a competent treasurer who can help fill out forms, keep records, research finance questions and file timely reports. There are also businesses that provide basic services of record keeping and reporting for a fee.
Forms and Filing Schedules
Form 501 is the initial form filed with the local election official when declaring candidacy. The local official (city or county clerk) will furnish and accept this form.
Form 410 is filed with the Secretary of State (copy to the clerk) and is how the campaign secures an FPPC committee ID number to be used on future forms, filings and on campaign advertising. Campaigns may file this form before being “qualified” by raising $2,000. Once $2,000 is raised an amended form is filed.
Form 460 details campaign contributions and expenditures and is filed throughout and after the campaign on a schedule provided by the clerk. This form is filed with the clerk/local election official.
Form 470 is filed with the local election official in years when a candidate does not have an active committee or campaign account and/or does not raise over $2.000 in campaign funds
FPPC Form 497 must be filed with the local election official within 24 hours if a candidate receives contributions that total in the aggregate $1,000 or more from a single source during the 90 days before the candidate’s election, including the date of the election.
Managing Contributions
Find out if your jurisdiction has campaign contribution limits that you must observe. The city clerk or county election officer will have that information.
Open a dedicated campaign bank account with your treasurer. All campaign contributions and spending flows through this account. Obtaining debit cards and a small number of checks with that account allows for efficient payment of bills by either the candidate or the treasurer.
Cash contributions of $100 or more are not permitted, and you cannot "make change" if someone hands you $100 in cash.
All contributions must be recorded on the date received by the campaign and with name and address of the contributor. For contributions of $100 or more, the employer of the contributor (if there is one) must be recorded as well.
In-kind contributions (ex: donation of goods/services) and non-monetary contributions (ex: raffle items) must also be recorded with date and estimated or declared value.
Campaign Expenditures
Personal funds may not be intermingled with campaign funds. If a purchase is required before the campaign account is opened, use a charge card that is not used for any personal items, and then pay it off with the campaign account. Candidates cannot be reimbursed by the campaign for expenditures using personal funds.
All expenditures from campaign funds must be campaign related or explicitly allowed by law. Campaign funds may not be used for personal expenses.
Keep records of all campaign expenditures with detailed information for expenditures of $100 or more to include date, amount, name, address, and what was purchased.
Do not use campaign funds to purchase tickets/sponsorships to events by federal candidates or PACs.
Advertisement Disclosures
The committee must include a “paid for by” disclosure on mass mailings and certain telephone calls advocating the candidate’s own election. Radio and television advertisements require a “paid for by” disclosure.
The Act does not require a specific disclosure on other candidate communications, such as billboards and yard signs, when they are paid for by a candidate’s committee. However, the FPPC recommends placing “paid for by [committee name]” and the committee’s ID number on all public campaign materials.
After the Election
Within 90 days after the election, the candidate must close the committee and account or update the committee and account. To update the committee, file an amended 410 with the new committee name for the next election for the same office and file a 501 with the local election official.
After 90 days, if the committee has remaining funds and is not updated, the remaining funds become surplus funds. Surplus funds are subject to rules that prohibit use for a future campaign.
After the election, office holders must continue to file a 470 or a 460 annually.
Record Retention
Campaign records must be retained for four years and are subject to audit.