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Analysis of the accounts of Madeleine's
Fund: Leaving No Stone Unturned (Reg.No.6248215) for the year ended 31 March 2014
By Enid O'Dowd FCA
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'From the outset everyone agreed that despite the costs
involved, it (the Fund) must be run to the highest standards of transparency whatever it cost.'
Commitment
given by Dr Kate McCann in her book madeleine (p. 138 Irish paperback edition)
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This analysis of the 2014 accounts should be read in conjunction
with my earlier reports 'A review of the background to setting up the limited company Madeleine's Fund: Leaving No
Stone Unturned and a forensic examination of the company accounts' published in February 2012 and the 'Analysis of
the accounts of Madeleine's Fund: Leaving No Stone Unturned (Reg.No.6248215) for the years ended 31 March 2012
and 31 March 2013' all available at
http://www.mccannfiles.comThe 2014 accounts were received in Companies House on 31 December 2014, the last possible filing date to avoid
a fine. The 2013 accounts were also filed on the last legal date. Neither the audited accounts nor any other financial information
is on the official website http://www.findmadeline.com/ The accounts for the year ended 31 March 2014 and 31 March 2013 were signed off by the Board on 16 December 2014
and 20 December 2013 respectively.
Directors' Report
The Directors' Report
is similar to last year's. The Report states that the Board meets 'on a regular basis, approximately every
month. During the year there were 4 meetings.' Surely that is quarterly not monthly meetings? Last year the Report also
referred to monthly meetings but then stated there were 5 held. Auditors' ReportThe narrative under the section 'scope and audit of the financial statements' has changed. In the
March 2013 accounts the narrative gave a detailed description of the scope of the audit. The 2014 Auditors' report merely
refers the reader to the Financial Reporting Council's website for a description of what is entailed. What significance,
if any, this change has is unclear. Income & Expenditure Account
Extract from the audited accounts –
Income and Expenditure Account for the year
ended 31st March 2014
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Merchandise and Campaign Costs
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Gross Surplus/(Deficit)
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Administration Expenses
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Operating Surplus/(Deficit)
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Profit/(Loss) on ordinary activities before taxation
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Tax on surplus on ordinary activities
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Surplus/(Deficit) for the year
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Note the change in terminology. The terms 'surplus'
and 'deficit' are normally used for charity and 'not for profit' accounts. The accounts use these terms for
two sub totals, change to Profit/ (Loss) and then revert to 'surplus' and 'deficit' again. This inconsistency
was also seen in the accounts for the previous two years. The accounts for the year ended 31 March 2011 used the term 'loss'
consistently and did not use the word 'deficit.'
Income is significantly up over the previous year because
Dr Kate McCann has donated a further £400,000 'for the direct costs of the search for and the investigation into
the disappearance of Madeleine'. This appears under the heading Restricted Funds. She made a donation of £738,487
in the year ended 31 March 2012, £550,000 of which was allocated to Restricted Funds and the balance £188,487
was included in the total of £306,393 under Unrestricted Funds. The total donated by her to the Fund is now £1,138,487:
£950,000 under Restricted Funds and £188,487 under Unrestricted Funds.
It is not obvious why Dr McCann
donated this additional substantial sum at this time. At the end of the previous accounting year there was £441,169
in the bank according to the Balance Sheet and creditors at that date were only £29,515.
The only other income
apart from Dr McCann's donation was £2,744 from sales of the book madeleine and £18,520 from other
donations none of which came via the website.
Expenditure
The accounts contain a breakdown
of expenditure with the comparative figures for 2013 which is interesting because following unfavourable internet comment
about the expenditure in the first set of audited accounts (May 2007- March 2008) such information was excluded from subsequent
accounts.
Total expenditure was £84,643 (merchandise and campaign costs £63,638 + administrative expenses
£21,005) which was well down on the 2013 total of £139,019. Given this lower level of expenditure it is strange
that such a sizeable donation was made by Dr McCann.
The Directors' Report states:
'The
Fund has scaled back independent investigative efforts to avoid duplication and to curb unnecessary expenditure. The Directors
still feel it is important however that the Fund maintains sizeable reserves so that the search for Madeleine can be resumed
quickly if/when the need arises.'
That statement doesn't adequately explain the donation to me.
Surely it makes more sense for Dr McCann to put her surplus funds in the best interest bearing account she can find,
and donate to the Fund if the need arises?
The breakdown gives the auditors fee as £8,280 while note 2 on
p.8 states that the fee is £5,900! I suspect the £5,900 is correct as the 2013 figure was £6,300 and it
is unlikely that the fee would increase so much for a company whose activities appear to be considerably less than in the
previous year.
The spending of £37,000 in year 1 on the official website attracted unfavourable comment.
In 2013 £5,700 was spent on it but this sum obviously did not include putting up the audited accounts or any other financial
information! Only £224 was spent on the website in 2014.
The Directors' Report says, as before, that
the Fund has paid for part-time administrative support yet note 2 on p.8 states the company had no employees. There are no
salary costs in the breakdown. There is a cost 'Fund Professional Fees' £7,398. Perhaps this is the part-time
support but if it is, why not use more appropriate terminology?
Legal fees and expenses £8,402 have been
paid under the 'Unrestricted' heading; presumably relating to the libel case in Portugal. These legal fees appear
low. Hotel travel and subsistence were £13,256 again presumably referring to the libel case.
The accounts
record interest receivable of £258. Given that cash at bank was £765,363 at 31 March 2014 and allowing for actual
expenditure paid in the year of £72,336 (£84,643 per Income and Expenditure Account less expenses not paid at
the year end £12,307 recorded as creditors on the Balance Sheet) surely more interest should have been generated even
allowing for the possibility that the £400,000 donation only came in at the end of the financial year.
The
Balance Sheet only refers to cash at bank so we don't know how much was on current account and how much was on deposit.
If the bulk of the money was in a current account this would explain the £258 interest received but it's hardly
likely that a company with an accountant, a lawyer and a self employed business person on the board would countenance such
sloppy cash management.
It is interesting to look at total Income and Expenditure since the company was incorporated
over seven years ago.
Madeleine's Fund: Review of audited
accounts from commencement
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Income
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Interest receivable
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Merchandise/
Campaign Costs
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Admin. Expenses
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Operating Surplus
/Deficit
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Taxation
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Audit
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Income is close to £4.3 million and expenditure £3.5
million. Over £50,000 has been paid in audit fees and over £25,000 for corporation tax relating to the profit
of the sale of merchandise. A detailed 7 year analysis of income is impossible as only in years 1and 7 was a breakdown provided. All that money spent and we still have no idea what happened to Madeleine. Clearly there are many stones left to be
unturned. The biggest mystery for me is still why this limited company was set up only days after Madeleine disappeared. (c) Enid O'Dowd 18 January
2015
www.enidodowd.com |
