Auditors flag missing documents in SNP accountsby
Auditors have said they are concerned about aspects of the Scottish National Party’s accounts as a police probe over irregular finances engulfs the party; experts say political organisations have no room for error when it comes to clean bookkeeping.
The Scottish National Party (SNP), under police investigation for financial irregularities, has disclosed it failed to keep original documentation relating to membership fee and donation income.
Auditors for the pro-independence party, AMS Accountants, gave a qualified opinion on the accounts for June 2022 and have flagged missing information around membership fees, donations, and raffle income.
AMS took on the job after a long search following the resignation of previous auditor Johnston Carmichael in October 2022.
The party is insistent it will meet the Electoral Commission’s July 7 audit deadline despite the “qualification” that some original data relating to income cannot be fully audited.
A qualified opinion indicates the auditor has some doubts about the information presented.
The SNP insists that the accounts of the party’s financial position are accurate, that it has responded to auditors’ administrative recommendations, and that there is no suggestion of misappropriation of funds.
“The audit contains one qualification relating to one stream of income due to administrative processes, resulting in a limitation in scope of the audit,” it said. “There is no suggestion that the accounts do not present an accurate picture of the party's financial position.”
Treasurer Stuart McDonald, who was appointed after the scandal broke, announced that the accounts for 2022 had been approved by the party’s National Executive Committee and it was “in a position to meet” its statutory obligations.
“The audit process is an important part of transparency in the political sphere and I am grateful to colleagues in party HQ and our auditors for delivering these accounts in a timely manner,” McDonald said.
McDonald said the SNP had “engaged with [the] auditors and implemented administrative changes in accordance with their recommendations” and that it would carry out a review of its governance following the lessons learned.
It was alleged that more than £600,000 raised from independence supporters for a referendum has disappeared from the SNP accounts. The party maintains all innocence.
A police probe into the matter led to the arrest in June of former leader Nicola Sturgeon, Scotland’s former first minister.
Former SNP chief executive Peter Murrell, who is married to Sturgeon, and Colin Beattie, the party’s then treasurer were arrested in April.
No charges have been brought against Sturgeon, Murrell or Beattie.
The SNP has been the leading voice in Scottish politics since winning power in 2007, but recent polls show a decline in support, with projections it will lose out to Labour at the next election.
“The murkiness around the SNP’s finances just won’t go away,” said Craig Hoy, chair of the Scottish Conservatives. “This would amount to a shocking lack of transparency in any organisation. From a party in government, it is a disgrace.”
Auditors, pillars of society
Finance specialist Alastair Hazell CFP, founder of The Calculator Site, said the absence of precise documentation “not only raises serious questions about the party's administrative processes but also potentially paves the way for legal implications”.
Rigorous bookkeeping, especially in a political framework, is “crucial”, he told AccountingWEB.
“It’s comparable to a row of dominos - once one topples, they all do. I recall an incident involving a non-profit client who, despite noble intentions, faced scrutiny and investigation due to poor financial record-keeping. This incident should serve as a wake-up call for the SNP,” he said.
Humza Yousaf took over the leadership from Sturgeon, but has found his term overshadowed by the investigation. He has promised action and admitted there are holes in the accounts which require an explanation.
“This admittance indicates an understanding of the vital importance of financial transparency and regulatory compliance in maintaining a party’s reputation,” said Hazell. “In these situations, auditors play a pivotal role, acting as guardians of financial integrity.”
There is also a larger lesson of how essential financial diligence is, said Hazell.
“Not only for political parties but for all organisations,” he said. “Auditors are not just accountants; they ensure trust and accountability, pillars on which our societal structures stand.”
“The SNP’s current predicament underscores the importance of stringent financial practices,” he said. “It’s a collective responsibility, extending from the grassroots members to the party leaders, to ensure financial integrity. The situation serves as a timely reminder for all to review their practices and initiate improvements where necessary.”