From the desk of AZGOP Treasurer Elijah H.

Norton

Treasurer’s Memorandum on 2022 Financial Audit

January 7th, 2025

To Arizona Republican Party Executive Committee, State Committee, and the public:

When I ran to be the Treasurer of the Arizona Republican Party (“AZGOP”) in 2023, I made a promise to
the State Committee: that I would conduct a comprehensive audit of the AZGOP 2022 financials. Prior to
my election, we had just come off of a disastrous year, and many were wondering what the cause was.
While I think there were numerous issues – one major issue stuck out in the minds of State
Committeemen and women, PC’s, and other interested actors: “how did the party in 2022 manage its
money?”

Today, I am pleased to announce that I have fulfilled the last campaign pledge I made to the State
Committee and party at large: at my direction, a CPA has completed an audit of the 2022 financials of
our party. Attached to this memorandum is the 2022 audited financial statements – that were required
under the AZGOP bylaws. They were audited by Atchley & Associates, a “disinterested” CPA firm (as
required by the AZGOP bylaws) that has audited other state parties in the past. This audit took hundreds
of hours of my time as well as other employees of the AZGOP to complete. All involved should be
commended on this endeavor, as the party’s financials haven’t been audited since at least 2018.

Before I opine on what was found I would like to state this; this memorandum is discussing things only
from a financial point of view as to how party finances affected the 2022 election. I am a financial
professional and therefore am not going to discuss what happened in the 2022 election from an election
integrity point of view, through the lens of the AZGOP.

Rumors swirled that the prior administration (for terms herein, “prior administration” means former
Chairwoman Kelli Ward, Executive Director Pam Kirby, and in some areas as it pertains to financial
reporting: former Treasurer Shelia Muehling – as those individuals had discretion over how party funds
were spent) had mismanaged party funds. Some rumors also circulated that the prior chair had stolen
party funds or engaged in “kickbacks” from vendors. Notwithstanding everything else, I would like to
put to rest the rumors that the prior administration engaged in theft or fraud – as nothing in the
operational or CPA audit that was conducted showed that theft or fraud occurred by any officers of the
prior administration in 2022.

What was revealed, however, in my opinion shows a clear failure to properly deploy assets in the right
areas – instead of prioritizing voter contact – the prior administration – in my opinion placed a higher
value on events, travel, and fundraising expenses. I believe the end result spoke for itself.
Here is a list of the key financial points that were found:

• The most glaring revelation at first glance of the financial is this – the party raised $6,218,583 in
donations in 2022. While nowhere near as high as the $19,710,116.06 that was raised in 2024, it
should be noted that over 51% - or $3,184,198 of this number was spent on fundraising
expenses. In fact, the “fundraising expense” line on the financials is the highest expenditure of
the year. In contrast, for the 2024 year, as of November 30th of 2024, less than $100,000 was
spent on fundraising expenses and fundraising consulting expenses for the party.
• Another area of interest was the amount spent on salaries. In 2022, $1,182,399 was spent on
salaries for party employees – nearly 20 percent of all party donations. While 90-120 days
before the general election, the RNC did coordinate with the party to hire temporary employees,
this number as a percentage of total donations is extremely high. For example, as of November
30th 2024 – despite seeing over triple the amount of donations – and being in a presidential
election year - the AZGOP spent $1,153,705.63 on payroll, which amounts to less than 6% of all
party donations for the 2024 fiscal year.
• A major point of contention for the prior administration was their excessive “event”
expenditures. Despite 2022 not requiring a state convention or tickets, hotel expenses, or other
expenses to the RNC quadrennial convention, the 2022 administration spent $614,681 (or nearly
10%) on “event expenses”. The election party cost the AZGOP $406,231.99 – which included
$209,285 paid to two vendors for “production expenses” as well as $226,296.99 payable to the
Scottsdale Resort at McCormick Ranch (the hotel where the party was held). The “election bus”
was another large expenditure. Four vendors appear to have been paid for the bus, which
totaled $66,950.50. To contrast, in 2024, $434,589.07 was spent on event expenses and
$77,418.56 was spent on travel, for a total of $512,007.63. These expense lines contained the
expenses for not just the state convention, but also the travel expenses for party staffers to
travel to Milwaukee as well as lunches and state-specific functions at the convention. It should
be noted that the AZGOP did not pay for delegates – all delegates travelled on their own dime.
• The areas of “voter contact” on the 2022 financial statements, were the “Advertising & Public
Relations”, “Printing”, and “Communications” lines. These areas totaled $365,611 and amounted
to only 5.9% of the total party budget. By contrast, in 2024, as of November 30th, 2024, the
AZGOP spent $14,610,764.17 on voter contact – or approximately 74% of the entire 2024
budget.
• In 2022 the party spent over $140,666 on supplies – an extremely high amount in proportion to
the amount of money the party raised. Over $15,000 of this was due to the prior treasurer
negotiating a commercially unreasonable, 5-year copy machine lease that still incumbers the
party to this day. As someone who has negotiated over 4 of such leases, the one she negotiated
was much higher than market value. The prior treasurer also insisted that the party pay for 3
different storage units, costing the party over $1,200 per month – again which could have been
avoided by using one unit.
• In 2022 the party did virtually NO coordinated mail – with the exception of one Congressional
candidate, who contributed $165,500 to the AZGOP - however that candidate’s campaign team
reported it was difficult to get mail out expeditiously – in one instance the candidate’s team
reported they were unable to locate the prior treasurer to get the needed approvals for nearly
an entire 24-hour period.
 • In 2022 no state legislators utilized the party as a vehicle to have a coordinated mail campaign as
occurred in 2024, where the party did over $750,000 in coordinated mail with legislative
candidates.
• The prior administration often sent out e-mails about the 2022 election audit – asking donors to
donate to the AZGOP to advance the audit, however no AZGOP funds, that we could verify, were
actually used to assist the audit. The cost was borne by the Arizona State Senate.
• The prior executive director has stated that she had signed an engagement letter with an
accounting firm. Numerous other parties have reported that she stated a prior CPA firm had
been provided information and started the process to begin an audit. Employees of the party
when I first took office were under the impression a retainer had also been paid to the firm. It is
true that a firm in Phoenix – Wallace, Please & Dreher- was engaged. However, Nikki Kuretich,
who is an employee at the firm, stated plainly in an e-mail to me that “no work was done or
billed for the 2022 audit”.
• During the 2022 election cycle, virtually NO major historical donor donated to the Arizona
Republican Party. It should be noted that the RNC gave the AZGOP $1,059,757.50 in transfers
during the 2022 election cycle. The NRCC gave $845,000; the NRSC gave $452,000. Take Back
the House and Take Back the Senate – two house GOP and senate GOP PAC’s gave
$317,412.41. In total, large committees gave the 2022 AZGOP $2,674,169.91. In 2024, as of
November 30th, 2024, the large committees gave the AZGOP $16,495,161.66.

Another major problem that we found had to do with the way the prior treasurer prepared the financial
statements. Under Generally Accepted Accounting Principles, the Internal Revenue Code, and state
and federal law, not-for-profit entities do not have Income Statements or Balance Sheets. Since by
definition they cannot make a profit or have equity, not-for-profit entities have Statement of Activities
instead of Income Statements and Statements of Financial Condition instead of balance sheets. The prior
treasurer – on multiple occasions and including at the state meeting – distributed incorrect financial
statements that a for-profit entity would normally distribute. The 2022 audit attached was prepared
correctly. Furthermore, the prior treasurer kept a second set of books in QuickBooks – despite the
AZGOP paying for Red Curve – a nationally recognized political accounting and compliance firm over
$3,500 per month to keep the AZGOP books. Red Curve uses NetSuite – a widely used advanced
accounting platform. The 2022 audit was prepared using the RedCurve financials, as they were the
financials that were reported to the FEC and Arizona Secretary of State – not the prior treasurer’s
second set of books.

Completing the 2022 audit was time-consuming, but an important task. Analyzing the activities of a
prior administration can be helpful for future AZGOP administrations because it allows them to compare
the differences in how funds were spent year-over-year and the outcomes based on how the AZGOP
apportions, raises, and spends party funds. Audits can paint a very comprehensive picture – numbers
don’t lie and facts are facts. In my opinion, the most glaring problematic fact of the 2022 election cycle
was the extremely high cost of fundraising – over 51% and the fact that less than 6% of the entire party
budget was spent actually contacting voters. It is my hope as the outgoing treasurer of the AZGOP that
future administrations do not repeat this behavior again and properly deploy party assets where they
are needed.

Signed,
Elijah Norton

Treasurer
Arizona Republican
Party
Audit Committee
Republican Party of Arizona
Phoenix, AZ

We are pleased to present this report related to our audit of the financial statements of the Republican
Party of Arizona (the Party) as of and for the year ended December 31, 2022. This report summarizes
certain matters required by professional
f standards to be communicated to you in your oversight
responsibility for the Party’s financial reporting process.

Required Communications

Generally accepted auditing standards (AU-C 260, The Auditor’s Communication With Those Charged
With Governance) require the auditor to promote effective two-way communication between the
auditor and those charged with governance. Consistent with this requirement, the following
summarizes our responsibilities regarding the financial statement audit as well as observations arising
from our audit that are significant and relevant to your responsibility to oversee the financial reporting
process.

Our Responsibilities with Regard to the Financial Statement Audit

Our responsibilities under auditing standards generally accepted in the United States of America have
been described to you in our arrangement letter dated July 22, 2024. Our audit of the financial
statements does not relieve management or those charged with governancer of their responsibilities,
which are also described in that letter.

Qualitative Aspects of the Entity’s Significant Accounting Practices

Preferability of Accounting Policies and Practices

Under the cash basis of accounting, in certain circumstances, management may select among
alternative accounting practices. In our view, in such circumstances, management has selected the
preferable accounting practice.

Adoption of, or Change in, Accounting Policies

Management has the ultimate responsibility for the appropriateness of the accounting policies used by
the Party. The Party did not adopt any significant new accounting policies, nor have there been any
changes in existing significant accounting policies during the current period.
Significant Accounting Policies

We did not identify any significant accounting policies in controversial or emerging areas for which
there is a lack of authoritative guidance or consensus.

Significant Unusual Transactions

We did not identify any significant unusual transactions.

Significant Accounting Estimates

Accounting estimates are an integral part of the financial statements prepared by management and are
based on management’s current judgments. Those judgments are normally based on knowledge and
experience about past and current events and assumptions about future events. Certain accounting
estimates are particularly sensitive because of their significance to the financial statements and because
of the possibility that future events affecting them may differ markedly from management’s current
judgments. Under the cash basis of accounting, there are no estimates.

Audit Adjustments and Uncorrected Misstatements

None of the misstatements identified by us as a result of our audit procedures and corrected by
management were material, either individually or in the aggregate, to the financial statements taken as
a whole.

We are not aware of any uncorrected misstatements other than misstatements that are clearly trivial.

Departure From the Auditors’ Standard Report

Emphasis-of-Matter Paragraph

The Party uses the cash basis of accounting in the preparation of its financial statements. In light of this
matter, we will include an emphasis-of-matter paragraph in the auditors’ report. Below is a draft of the
paragraph to be included in the auditors’ report:

Basis of Accounting
We draw attention to Note A of the financial statements, which describes the basis of accounting.
The financial statements are prepared on the cash basis of accounting, which is a basis of
accounting other than accounting principles generally accepted in the United States of America.
Our opinion is not modified with respect to this matter.
Observations About the Audit Process

Disagreements with Management

We encountered no disagreements with management over the application of significant accounting

principles, the basis for management’s judgments on any significant matters, the scope of the audit or
significant disclosures to be included in the financial statements.

Consultations with Other Accountants

We are not aware of any consultations management had with other accountants about accounting or
auditing matters.

Significant Issues Discussed with Management

No significant issues arising from the audit were discussed or the subject of correspondence with
management.

Significant Difficulties Encountered in Performing the Audit

We did not encounter any significant difficulties in dealing with management during the audit.

Shared Responsibilities: AICPA Independence

The AICPA regularly emphasizes that auditor independence is a joint responsibility and is managed
most effectively when management, audit committees (or their equivalents), and audit firms work
together in considering compliance with American Institute of Certified Public Accountants (AICPA)
independence rules. For Atchley & Associates (the Firm) to fulfill its professional responsibility to
maintain and monitor independence, management, the Audit Committee, and the Firm each play an
important role.

Our Responsibilities
x AICPA rules require independence both of mind and in appearance when providing audit and other
attestation services. The Firm is to ensure that the AICPA’s General Requirements for performing
non-attest services are adhered to and included in all letters of engagement.
x Maintain a system of quality control over compliance with independence rules and firm policies.

Your Responsibilities
x Timely inform the Firm, before the effective date of transactions or other business changes, of the
following:
í New affiliates, directors, officers, or persons in financial reporting oversight roles.
í Change in corporate structure impacting affiliates such as add-on acquisitions or exits.
x Provide necessary affiliate information such as new or updated investment structure charts, as well
as financial information required to perform materiality calculations needed for making affiliate
determinations.
x Understand and conclude on the permissibility, prior to the Party and its affiliates, officers,
directors, or persons in a decision-making capacity, engaging in business relationships with the
Firm.
x Not entering into relationships resulting in close family members of the firm covered persons,
temporarily or permanently acting as an officer, director, or person in an accounting or financial
reporting oversight role at the Party.

Significant Written Communications Between Management and Our Firm

Copies of significant written communications between our firm and the management of the Party,
including the representation letter provided to us by management, is included in an attached letter.

This report is intended solely for the information and use of the Audit Committee and management and
is not intended to be and should not be used by anyone other than these specified parties. It will be our
pleasure to respond to any questions you have regarding this report. We appreciate the opportunity to
continue to be of service to the Party.

Austin, Texas
December 11, 2024
Atchley & Associates, LLP 12/11/2024
1005 La Posada Drive
Austin, Texas 78752

This representation letter is provided in connection with your audit of the financial statements
of the Republican Party of Arizona, (the Party) which comprise the statement of assets and
liabilities arising from cash transactions as of December 31, 2022, and the related statement
of revenue collected and expenses paid and changes in net assets – cash basis for the year
then ended, and the related notes to the financial statements. We confirm that we are
responsible for the fair presentation in the financial statements of financial position and results
of activities in conformity with the cash basis of accounting consistently applied.

We confirm, to the best of our knowledge and belief, as of the date of this letter, the
following representations made to you during your audit:
Financial Statements
1. We have fulfilled our responsibilities, as set out in the terms of the audit arrangement letter
dated July 22, 2024, for the preparation and fair presentation of the financial statements
referred to above in accordance with the cash basis of accounting.
2. We acknowledge our responsibility for the design, implementation, and maintenance of
internal control relevant to the preparation and fair presentation of financial statements
that are free from material misstatement, whether due to fraud or error.
3. We acknowledge our responsibility for the design, implementation, and maintenance of
internal control to prevent and detect fraud.
4. Related party relationships and transactions have been appropriately accounted for and
disclosed in accordance with the requirements of the cash basis of accounting.
5. We have no knowledge of any uncorrected misstatements in the financial statements.
6. With respect to drafting the financial statements, we have performed the following:
a. Made all management decisions and performed all management functions;
b. Assigned a competent individual to oversee the services;
c. Evaluated the adequacy of the services performed;
d. Evaluated and accepted responsibility for the result of the service performed; and
e. Established and maintained internal controls, including monitoring ongoing
activities.
7. The effects of all known actual or possible litigation and claims have been accounted for
and disclosed in accordance with the cash basis of accounting.
8. The following have been properly recorded and/or disclosed in the financial statements:
a. All leases and material amounts of rental obligations under long-term leases.
b. All material concentrations known to management that are required to be disclosed
in accordance with the Risks and Uncertainties Topic of the FASB Accounting Standards
Codification. Concentrations refer to volumes of business, revenues, available sources
 of supply, or markets for which events could occur that would significantly disrupt
normal finances within the next year.
c. Concentrations of credit risk.
d. All recordable contributions, by appropriate net asset class.
e. Guarantees, whether written or oral, under which the Party is contingently liable.

Information Provided

We have provided you with:

9.
a. Access to all information, of which we are aware that is relevant to the preparation
and fair presentation of the financial statements such as records, documentation, and
other matters;
b. Additional information that you have requested from us for the purpose of the
audit;
c. Unrestricted access to persons within the entity from whom you determined it
necessary to obtain audit evidence.
d. Minutes of the meetings of directors, and committees of directors, or summaries of
actions of recent meetings for which minutes have not yet been prepared.
10. All transactions have been recorded in the accounting records and are reflected in the
financial statements.
11. We have disclosed to you the results of our assessment of risk that the financial statements
may be materially misstated as a result of fraud.
12. We have no knowledge of allegations of fraud or suspected fraud, affecting the entity’s
financial statements involving:
a. Management.
b. Employees who have significant roles in the internal control.
c. Others where the fraud could have a material effect on the financial statements.
13. We have no knowledge of any allegations of fraud or suspected fraud affecting the Party’s
financial statements received in communications from employees, former employees,
regulators, or others.
14. We have no knowledge of noncompliance or suspected noncompliance with laws and
regulations whose effects should be considered when preparing financial statements.
15. We are not aware of any pending or threatened litigation and claims that are required to
be accrued or disclosed in the financial statements in accordance with the cash basis of
accounting.
16. We have disclosed to you the identity of the Party’s related parties and all the related-party
relationships and transactions of which we are aware.
17. We are aware of no significant deficiencies, including material weaknesses, in the design or
operation of internal controls that could adversely affect the Party's ability to record,
process, summarize, and report financial data.
18. There have been no communications from regulatory agencies concerning noncompliance
with, or deficiencies in, financial reporting practices.
19. We have no plans or intentions that may materially affect the carrying value or classification
of assets. In that regard:
a. The Party has no plans or intentions to discontinue the operations of any significant
programs.
20. There are no:
a. Violations or possible violations of laws or regulations whose effects should be
considered for disclosure in the financial statements or as a basis for recording a loss
contingency.
b. Other material liabilities or gain or loss contingencies that are required to be
accrued or disclosed by the Contingencies Topic of the FASB Accounting Standards
Codification.
c. Arrangements with financial institutions involving compensating balances or other
arrangements involving restrictions on cash balances.
d. Lines of credit or similar arrangements.
e. Agreements to repurchase assets previously sold.
f. Security agreements in effect under the Uniform Commercial Code.
g. Other liens or encumbrances on assets and all other pledges of assets.
h. Amounts of contractual obligations for construction and/or purchase of real
property, equipment, other assets, and intangibles.
i. Liabilities that are subordinated to any other actual or possible liabilities of the
Party.
j. Pension obligations, postretirement benefits, or deferred compensation
agreements.
21. The Party has satisfactory title to all owned assets.
22. We have complied with all aspects of contractual agreements, grants, and donor
restrictions that would have a material effect on the financial statements in the event of
noncompliance. In connection therewith, we specifically represent that we are responsible
for determining that we are not subject to the requirements of the Single Audit Act and
Uniform Guidance, because we have not received, expended, or otherwise been the
beneficiary of the required amount of federal awards during the period of this audit.
23. We have received a determination from the Internal Revenue Service that we are exempt
from federal income taxes as a Section 527 political Party, except for earnings on interest
income, and we have complied with the IRS regulations regarding this exemption.
24. We are responsible for determining that significant events or transactions that have
occurred since the date of the statement of assets and liabilities arising from cash
transactions and through the date of this letter have been recognized or disclosed in the
financial statements. No events or transactions have occurred subsequent to the date of
the statement of assets and liabilities arising from cash and through the date of this letter
that would require recognition or disclosure in financial statements. We further represent
that, as of the date of this letter, the financial statements were complete in a form and
 format that complied with the cash basis of accounting, and all approvals necessary for
issuance of the financial statements had been obtained.
25. During the course of your audit, you may have accumulated records containing data that
should be reflected in our books and records. All such data have been so reflected.
Accordingly, copies of such records in your possession are no longer needed by us.

Republican Party of Arizona

Gina Swoboda, Chairwoman

Elijah Norton, Treasurer

Republican Party of Arizonia
Financial Statements and
Independent Auditors' Report
December 31, 2022
 Republican Party of Arizonia

Table of Contents

Page

Independent Auditors' Report 1

Financial Statements

Statement of Assets and Liabilities Arising from Cash Transactions 3

Statement of Revenues Collected, Expenses Paid, and Changes in

Net Assets - Cash Basis 4

Notes to Financial Statements 5

 Independent Auditors' Report

To the Members
Republican Party of Arizonia
Phoenix, AZ

Opinion

We have audited the accompanying financial statements of the Republican Party of Arizonia (the Party),
which comprise the statement of assets and liabilities arising from cash transactions as of December 31,
2022, and the related statement of revenues collected, expenses paid, and changes in net assets - cash basis
for the year then ended, and the related notes to the financial statements.

In our opinion, the financial statements referred to above present fairly, in all material respects, the assets
and liabilities arising from cash transactions of the Party as of December 31, 2022, and its revenues
collected and expenses paid during the year then ended in accordance with the cash basis of accounting
described in Note 1.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in the United States of
America (GAAS). Our responsibilities under those standards are further described in the Auditors'
Responsibilities for the Audit of the Financial Statements section of our report. We are required to be
independent of the Party and to meet our other ethical responsibilities, in accordance with the relevant
ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.

Basis of Accounting

We draw attention to Note 1 of the financial statements, which describes the basis of accounting. The
financial statements are prepared on the cash basis of accounting, which is a basis of accounting other than
accounting principles generally accepted in the United States of America. Our opinion is not modified with
respect to this matter.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in
accordance with the cash basis of accounting; this includes the design, implementation, and maintenance of
internal control relevant to the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors' Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our
opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not
a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement
when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or
the override of internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user based on the
financial statements.

In performing an audit in accordance with GAAS, we:

• Exercise professional judgment and maintain professional skepticism throughout the audit.

• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements.

• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of Party's internal control. Accordingly, no such opinion is expressed.

• Evaluate the appropriateness of accounting policies used and the reasonableness of significant
accounting estimates made by management, as well as evaluate the overall presentation of the
financial statements.

• Conclude whether, in our judgment, there are conditions or events, considered in the aggregate,
that raise substantial doubt about Party's ability to continue as a going concern for a reasonable
period of time.

We are required to communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit, significant audit findings, and certain internal control–related matters
that we identified during the audit.

Austin, Texas
December 11, 2024

-2-
 Republican Party of Arizonia
Statement of Assets and Liabilities Arising from Cash Transactions
December 31, 2022

Assets
Cash $ 1,008,519

Total assets $ 1,008,519

Liabilities and net assets

Liabilities $ -

Net assets
Without donor restrictions 1,008,519
With donor restrictions -

Total net assets 1,008,519

Total liabilities and net assets $ 1,008,519

The accompanying notes are an integral part of these financial statements.

-3-
 Republican Party of Arizonia
Statement of Revenues Collected, Expenses Paid,
and Changes in Net Assets - Cash Basis
Year Ended December 31, 2022

Support and revenue

Contributions $ 6,218,583
Total support and revenue 6,218,583

Expenses
Advertising & public relations 305,701
Communication 46,696
Event expense 614,681
Fundraising 3,184,198
Insurance 86,130
Legal fees 381,178
Meeting expense 64,719
Printing 13,214
Professional fees 85,640
Rent 92,538
Salaries 1,182,399
Supplies 140,666
Travel expenses 56,132
Utilities 17,886
Total expenses 6,271,778

Change in net assets (53,195)

Net assets at beginning of the year 1,061,714

Net assets at end of the year $ 1,008,519

The accompanying notes are an integral part of these financial statements.

-4-
 Republican Party of Arizonia
Notes to Financial Statements
Year Ended December 31, 2022

NOTE A - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES

The following is a summary of the significant accounting policies of the Republican Party of
Arizonia (the Party), an unincorporated political organization, which have been consistently
applied in the preparation of the accompanying financial statements.

Nature of Activities

The Party is the permanent organization which administers the Republican Party primary elections
and conventions in Arizona, and which certifies Republican candidates for office in general
elections. The Party is governed by the Executive Committee which consists of elected and
appointed officers and precinct chairs elected from each of the available 1,069 precincts. Through
its activities, the Party assists the organization of Republican Party units at the county and precinct
levels and works to help elect Republican candidates in general elections.

Basis of Accounting

The financial statements are prepared on the cash basis of accounting. Under this method, support
and revenue are recognized when received rather than when earned and expenses are recognized
when paid rather than when incurred. Therefore, receivables, fixed assets, payables, accrued
income and expenses, which would be recognized under generally accepted accounting principles,
and which may be material in amount, are not recognized in the accompanying financial
statements.

Net Assets

The Party classifies net assets into two categories: net assets without donor restrictions and net
assets with donor restrictions. Contributions of cash and other assets are reported as restricted
support if they are received with donor stipulations that limit the use of the donated assets. When a
donor restriction expires, that is, when a stipulated time restriction passes or purpose restriction is
accomplished, net assets with donor restrictions are reclassified as net assets without donor
restrictions and reported in the statement of revenues collected, expenses paid, and changes in net
assets as net assets released from restrictions. There were no net assets with donor restrictions at
December 31, 2022, and during the year then ended.

-5-
 Republican Party of Arizonia
Notes to Financial Statements
Year Ended December 31, 2022

NOTE A - NATURE OF ACTIVITIES AND SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES (Continued)

Income Taxes

The Party is taxed as a political organization, in accordance with Internal Revenue Code Section
527, and is taxed only on income not specifically exempted, such as interest and dividend income.

The Party follows the accounting standard on accounting for uncertainty in income taxes, which
addresses the determination of whether tax benefits claimed or expected to be claimed on a tax
return should be recorded in the financial statements. Under this guidance, the Party may recognize
the tax benefit from an uncertain tax position only if it is more likely than not that the tax position
will be sustained on examination by taxing authorities based on the technical merits of the position.
The tax benefits recognized in the financial statements from such a position are measured based on
the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.
The guidance on accounting for uncertainty in income taxes also addresses de-recognition,
classification, interest and penalties on income taxes, and accounting in interim periods. The tax
returns for the years ended December 31, 2019, and after are open to examination by federal and
local authorities.

Compliance with Campaign Acts

The Party is subject to audit for compliance with federal and state election regulations by
representatives of the Federal Election Commission and Arizonia Campaign Finance Law. In the
opinion of management, the Party has complied with federal and state election regulations, and
adjustments, if any, resulting from an audit of the Party would not materially affect their financial
position.

Subsequent Events

Management of the Party has evaluated subsequent events for disclosure through the date of the
Independent Auditors' Report, the date the financial statements were available to be issued. See
Note D.

-6-
 Republican Party of Arizonia
Notes to Financial Statements
Year Ended December 31, 2022

NOTE B - CONCENTRATION OF CREDIT RISK

The Party maintains its cash deposits in high credit quality financial institutions. At various times
during the year, these deposits may exceed Federal Deposit Insurance Corporation (FDIC) limits.
Management assesses the credit risk associated with the deposits on an ongoing basis. The Party
has not experienced any losses in such accounts and management believes it is not exposed to any
significant credit risk on these deposits. At December 31, 2022, the Party's deposits exceed FDIC
insurance limits by $807,269.

NOTE C - LEASE COMMITMENTS

The Party leases office space under a lease expiring through May 2023. Rent expense for office
space for headquarters for the year ended December 31, 2022, was $92,538. The lease was not
renewed once it expired.

The following is a summary of future minimum rental payments under these operating leases:

Year ending June 30, Amount

2023 $ 23,490

NOTE D - SUBSEQUENT EVENTS

On June 6, 2023, the Party created a wholly-owned subsidary, the Arizona Freedom Center, LLC
(Freedom Center). The Freedom Center's purpose is to own, operate, and lease real estate.

-7-