Keep all accounts, bills, receipts, books, papers, and other documents that substantiate lobbyist reports for five years. However, if the lobbyist is required, as part of his or her employment agreement, to turn all records over to the employer, the employer must keep them for five years. RCW 42.17A.655.
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 of the Public Disclosure Law to insure that the record keeping system used will enable both the lobbyist and employer to prepare and substantiate the 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 reporting requirements of the disclosure law. The PDC has compiled these hints and suggestions to assist lobbyists with record keeping:
- 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 when received or paid.
- A lobbyist’s report covers a calendar month and a lobbyist employer’s report covers 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 when the report is filed.
- Separate accounts, subsidiary ledgers or a similar system to segregate or identify expenses for lobbying from other expenses should be established. A separate bank account and separate credit cards for lobbying-related purchases is recommended as well as labeling lobbying expenses on expense vouchers (or creating a separate voucher with just lobbying expenses).
- Keep receipts for all purchases. Annotate receipts with the date of purchase, purpose, and persons in the party.
- Keep a record of time spent lobbying. This is especially important for the lobbyist who performs other duties for the employer and the lobbyist who has more than one employer.
- Assign one person the duty of gathering financial data for lobbying reports.
- 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. The PDC publishes an annual List of Elected Officials that identifies state officials and the 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. The PDC staff can often offer suggestions or the lobbyist could request a reporting modification from the Commission.