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Madeleine's Fund - Analysis of Accounts to 31/03/2014 *

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Enid O'Dowd analyses the accounts of Madeleine's Fund: Leaving No Stone Unturned Limited for the year ended 31 March 2014

Exclusive to mccannfiles.com

Analysis of the accounts of Madeleine's Fund: Leaving No Stone Unturned (Reg.No.6248215) for the year ended 31 March 2014, 25 January 2015
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

 
'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)

 

 

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.com

The 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' Report

The 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
 
Unrestricted Funds
£
Restricted Funds
£
2014
Total Funds
£
2013
Total Funds
£

Income

21,264

400,000

421,264

70,250
Merchandise and Campaign Costs

(22,791)

(40,847)

(63,638)

(115,109)
Gross Surplus/(Deficit)

(1,527)

359,153

357,626

(44,859)
Administration Expenses

(21,005)

0

(21,005)

(23,910)
Operating Surplus/(Deficit)

(22,532)

359,153

336,621

(68,769)
Interest receivable

258

0

258

323
Profit/(Loss) on ordinary activities before taxation

(22,274)

359,153

336,879

(68,466)
Tax on surplus on ordinary activities

0

0

0

9,756
Surplus/(Deficit) for the year

(22,274)

359,153

336,879

(58,969)

 

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
 
Total
31/03
2014
31/03
2013
31/03
2012
31/03
2011
31/03
2010
31/03
2009
15/05
2007
-
31/03
2008
                 
Income
4,233,899
421,264
70,250
856,393
177,534
233,099
629,181
1,846,178
Interest receivable
56,213
258
323
149
101
373
21,585
33,424
 
4,290,112
421,522
70,573
856,542
177,635
233,472
650,766
1,879,602
                 
Merchandise/
Campaign Costs
3,212,141
63,638
115,109
476,813
487,193
421,236
974,786
673,366
Admin. Expenses
299,234
21,005
23,910
24,909
26,930
29,868
30,865
141,747
 
3,511,375
84,643
139,019
501,722
514,123
451,104
1,005,651
815,113
                 
Operating Surplus
/Deficit
778,737
336,879
-68,446
354,820
-336,488
-217,632
-354,885
1,064,489
                 
Taxation
-25,681
0
9,756
-5,128
-8,371
-2,598
-6,878
-12,462
                 
Surplus/Deficit
for year
753,056
336,879
-58,690
349,692
-344,859
-220,230
-361,763
1,052,027
                 
Audit
50,085
5,900
6,300
6,300
6,300
6,169
5,750
13,366
                 

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

See also:

Madeleine's Fund - Review & Investigation of Accounts
Madeleine's Fund - Analysis of the accounts year ended 31/03/2012

Launch of Madeleine's Fund

 

Enid O'Dowd takes an in depth look into the setting up and subsequent running of Madeleine's Fund: Leaving No Stone Unturned Limited (up to the release of the 2010/2011 Accounts)

Exclusive to mccannfiles.com

Brian Kennedy

 

Enid O'Dowd: An analysis of the accounts of Madeleine's Fund: Leaving No Stone Unturned for the year ended 31 March 2012, and of issues arising from that analysis

Exclusive to mccannfiles.com

Madeleine's Fund - Analysis of the accounts year ended 31/03/2013
Libel trial witnesses for the McCanns who had their expenses covered by Madeleine's Fund

Enid O'Dowd: An analysis of the accounts of Madeleine's Fund: Leaving No Stone Unturned for the year ended 31 March 2013, and of issues arising from that analysis

Exclusive to mccannfiles.com

With thanks to Nigel at McCann Files

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