An embezzlement scheme by former Treasurer Christopher Ward that has already cost the National Republican Congressional Committee $725,000 in stolen funds and more than $800,000 to correct matters has created additional fallout, the NRCC revealed Thursday afternoon.

The committee will need to hire an outside firm to conduct a standard audit of its books for 2007, and until that audit is complete, the NRCC will not be able to take out any bank loans to fund independent expenditure campaigns in late-breaking races.

Although a standard audit of the NRCC’s books for 2007 should only take around six weeks to complete, the cash-strapped committee will not be eligible to receive a bank loan until it receives a clean financial bill of health, said Robert Kelner, a partner with Covington & Burling, the firm that just completed a forensic audit of the NRCC’s books, which was ordered after Ward’s alleged embezzlement scheme was discovered in late January.

NRCC officials said Thursday that the committee is in the process of preparing to request bids for the standard 2007 audit, adding that they fully expected the audit to be complete in time for the committee to borrow money to finance this year’s elections. Even Congressional campaign committees with plenty of money — such as last cycle’s NRCC — tend to borrow money down the stretch of a campaign to spend on independent expenditures in competitive races.

When asked if the NRCC would be in a position to borrow money from a bank this fall, committee Chairman Tom Cole (Okla.) said: “I think so, but we’ll just have to now work that through.”

The ability to obtain a line of credit, while standard practice for a national party committee, could be particularly important for the NRCC this fall. The committee had $6.7 million in cash on hand as of April 30 and has 30 open seats to defend and several incumbents being threatened by the cash-flush Democratic Congressional Campaign Committee.

The DCCC closed April with more than $45 million in the bank.

At a news conference Thursday, Kelner described in detail how Ward allegedly stole money from the NRCC — and an additional $28,000 from the National Republican Senatorial Committee, although he declined to reveal everything Covington & Burling’s investigation discovered so as not to interfere with an FBI investigation of Ward that remains ongoing.

“This isn’t a particularly clever fraud,” Kelner said.

Ward stole most of the funds he embezzled from the President’s Dinner fundraising event committee’s bank account, according to the audit. In some cases, he allegedly moved money from the NRCC to the President’s Dinner account, and then moved the money from there to his personal account. In other cases, he moved money directly from the President’s Dinner committee account to his own account. Still, in other cases, he used other political committees within his control to move money around and ultimately into his possession.

Ward conducted all of this activity via bank wire transfers, Kelner said. He explained that there were controls in place at the NRCC to prevent this, but that it was easy to poke holes in the protections by going the wire-transfer route, as opposed to writing checks.

This year’s President’s Dinner fundraising event, the last of President Bush’s White House tenure, is scheduled for Wednesday.

Because banks only have to keep records for seven years, Kelner’s team was only able to investigate Ward’s activities going back to 2001, although he had been working at the NRCC since 1995. Ward ceased to be the treasurer last summer, and his outside contract with the committee was terminated in late January when his alleged embezzlement scheme was discovered by the NRCC.