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Auditors flag missing documents in SNP accounts

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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.

6th Jul 2023
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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.

‘Murky business’

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.”

Replies (13)

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By RFL H
06th Jul 2023 11:15

I will be interested to see if the cost of the campervan is disclosed in the 2023 accounts.
It was hidden in the 2022 accounts - NBV on BS but included in Equipment on the note.

https://search.electoralcommission.org.uk//Api/Accounts/Documents/24333

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Replying to RFL H:
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By mumpin
06th Jul 2023 12:53

If you were in the Soviet Politburo you were rewarded with a dacha.
Poor old Nicky had to buy her own campervan!

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Replying to RFL H:
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By GDavidson
07th Jul 2023 10:07

It wasn't "hidden" in last year's accounts. It was right there on the balance sheet.

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Replying to GDavidson:
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By RFL H
10th Jul 2023 11:26

The cost is hidden - only NBV was disclosed.

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By Hugo Fair
06th Jul 2023 13:50

It'll be interesting to see what's actually in tomorrow's report ... qualification or otherwise?

What about the "more than £600,000 raised from independence supporters for a referendum that has (reputedly) disappeared from the SNP accounts"?

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Replying to Hugo Fair:
paddle steamer
By DJKL
10th Jul 2023 17:09

Is it not all within their wholly owned sub, "Scottish New Private Van Hires", discount campervan hires with free Ferry crossings to the islands thrown in (when they run) and free flights to and from Prestwick.

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Replying to DJKL:
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By Hugo Fair
10th Jul 2023 18:04

Ah ... I've been keeping my eyes peeled for new 'trading as' registrations - along the lines of Non Income Capital On Loan Accounting (with a piscine logo). :=)

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By possep
06th Jul 2023 14:02

CAMPAIGN ORGANISATIONS

Should that have read as camping organisations?

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By Tax is always taxing
06th Jul 2023 16:27

“There is no suggestion that the accounts do not present an accurate picture of the party's financial position.”

Qualified audit report, police raiding the HQ and the 3 signatories being arrested slightly contradict this position.

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Donald MacKenzie
By Donald MacKenzie
07th Jul 2023 09:54

"The SNP insists that the accounts of the party’s financial position are accurate"

Reminds me of "Chemical Ali" during the Gulf war.

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By chrisowen
07th Jul 2023 11:23

Will we ever know what happened to the missing £500,000 ?

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By geoffmw1
07th Jul 2023 12:46

I'm merely speculating but could this simply be a case of anonymous donor(s)?

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By GrayMan
07th Jul 2023 15:38

Perhaps we all misunderstood but personally, I thought anonymous donors were persons that donated money to the party, not persons that the party donated money to. It’s a simple enough mistake to make.

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