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

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.