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Madeleine's Fund - Analysis of Accounts to 31/03/2012 *



Brian Kennedy, 17 May 2007
Brian Kennedy: "the money can be used, errr... for all sorts of reasons but probably mainly
for legal expenditure" - 17 May 2007

Enid O'Dowd analyses the accounts of Madeleine's Fund: Leaving No Stone Unturned Limited for the year ended 31 March 2012

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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 2012, and of issues arising from that analysis, 29 January 2013
Analysis of the accounts of Madeleine's Fund: Leaving No Stone Unturned (Reg.No.6248215) for the year ended 31 March 2012, and of issues arising from that analysis

By Enid O'Dowd FCA

This analysis of the 2012 accounts should be read in conjunction with my report '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 on

It is relevant to state here that Dr Kate McCann, a director of the Fund, made a commitment in her book Madeleine (p.138 Irish paperback edition) that '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'. This was a clear commitment that from May 2007 when the Fund (limited company) was established, that transparency was paramount. My earlier report found a distinct lack of transparency. Were the 2012 accounts more 'transparent' than the earlier ones? Not in my opinion.

The 2012 accounts were received in Companies House on 9th January 2013 after the latest filing date (31st December 2012); a fine of £150 applies. I commented in my earlier report on the consistent pattern of filing close to the legal deadline and how this did not tally with Dr Kate McCann's public commitment to transparency, especially when the audited accounts and other financial information are not on the official website

The accounts for the year ended 31st March 2012 were signed off by directors Edward Smethurst and Brian Kennedy on 21st December 2012, and by the auditors haysmacintyre on the same day. There is therefore no logical reason why they were not filed on time. The optics of late filing for such a company which seeks donations from the public is surely something the board would consider. I can only say the reason for the late filing is a mystery to me.

Incidentally, the March 2011 accounts were signed off on 22nd December 2011 and they were filed on time.

Earlier accounts had always listed two firms of solicitors acting for the company. Bates Wells and Braithwaite, the firm that set up the company in May 2007 are no longer listed though their company secretarial arm BWB Secretarial Ltd is still listed as the company secretary, as it has been since commencement. Only one firm of solicitors Stephenson Harwood is listed in 2012. This firm had been listed on the company information page with Bates Wells and Braithwaite since March 2009.

The Directors' Report states that due to the Metropolitan Police Review (MPS) approved in May 2011, the Fund 'has scaled back independent investigative efforts during this period to avoid duplication and to curb unnecessary expenditure.' Later in the Directors' Report it states that 'from March 2012 private investigation lines of inquiry have been suspended while the MPS review progresses. The private investigation team employed by the Fund continue to co-operate and work with the Metropolitan police force as and when necessary.'

A Sunday Express article on 28th October 2012 said that the McCanns stopped using their investigation team, which was composed of former police detectives Dave Edgar and Arthur Cowley, 'some months ago' when their contract ran out. Yet the Directors' Report signed on 21st December 2012 referred to the private investigation team as being 'employed' by the Fund which I take to mean they were still employed at the date of the Report, rather than at 31st March 2012, albeit in a very restricted role.

The Report states that all material relating to Madeleine's abduction held by the Fund has been handed over to the Metropolitan Police which would surely limit the Fund team's role, unless the presumably vast amount of documentation had been photocopied before handover.

Board meetings in 2012 were 8, as opposed to 11 in 2011 and in all other years; perhaps this reflects the reduced activity in the year.

Extract from the audited accounts –
Income and Expenditure Account for the year ended 31st March 2012

Unrestricted Funds
Restricted Funds
Total Funds £
Total Funds £





Merchandise and Campaign Costs




Gross Surplus/(Deficit)




Administration Expenses




Operating Surplus/(Deficit)





If activities were scaled down, you would expect expenditure in 2012 to be significantly down on the 2011 figure, but it is only 2.41% down. Total expenditure for 2012 was £501,722 (2011 - £514,123). This figure included administration costs of £24,909.

We are told in Note 5 – Restricted Funds that following the publication of the book Madeleine, £550,000 was donated for 'the direct costs of the search for and the investigation into the disappearance of Madeleine.' Interestingly the auditors' note uses the word 'disappearance' rather than 'abduction' which is the word used by the directors in their report.

In earlier accounts there was no allocation of funds (ie income received) into restricted and unrestricted funds. While it is common for charities and 'not for profit' organisations to have the item restricted funds in their accounts, this is because they have a range of projects ongoing at any time which are relevant to their organisation but some of which are specifically grant aided or raised from the public for a particular purpose and therefore require separate accounting.

For example the charity Missing People, for whom Dr Kate McCann was appointed an Ambassador in 2012, include the heading, restricted funds, in their published accounts for the year ended 31st March 2012. Over 70% of their income is designated as 'restricted.' These accounts give much more information than the Fund accounts do. While accepting that as a registered charity, Missing People has to give more information in its accounts than a private limited company like the Fund does, I would have expected the Fund's directors to have utilised the Missing People accounts as a best practice benchmark to improve the information provided in the Fund accounts.

In the case of the Fund, essentially it has one purpose; to find Madeleine and/or to discover what happened to her. Surely all expenditure incurred is for that purpose and the need to 'restrict' some funds for the 'direct search' is debatable.

It is not clear whether the £550,000 restricted income is the advance royalty payment received for the book, or if not, why this particular amount has been chosen. Note 5 is open to different interpretations. It refers to the money being donated after the publication of the book Madeleine. It could mean that the publication resulted in a donor or donors being so influenced by the book that they gifted money to the Fund with specific restrictions.

Alternatively, it was reported in the media that around £550,000 was received for the serialisation rights of the book; this figure may of course be media speculation. Note 5 may relate to some or all of this income.

The costs under the Restricted Funds heading in the Fund accounts were £234,086 but the accounts' narrative describes them as Merchandise and Campaign costs, rather unhelpful terminology when presumably these costs were for investigators' fees, travel and other expenses.

This is a lot of money for an investigation that had been scaled down.

The £242,717 costs for Merchandise and Campaign costs under Unrestricted Funds are also hard to understand. While this would have included the hotline telephone service, fees to a Portuguese communications agency and the ongoing awareness campaign mentioned in the Directors' Report, it's hard to accept that these items would have cost so much.

The hotline service is an 0845 number which can be expensive for those calling on a mobile. Such numbers are popular with commercial organisations; they generate profits for the organisation as they get a percentage of the charge made to the caller. They are also inexpensive to run for the organisation. An 0800 number would be more logical for an organisation searching for a missing child as such lines are generally free or cheaper for the caller than other numbers. Last year the charity Missing People launched a free phone number 116 000. Given the money available to the Fund in the accounting year under review, I would have expected the Board to consider this option so that there would be no financial deterrent to the public phoning in leads to the Fund hotline.

Director Brian Kennedy (Kate McCann's uncle) said in a BBC TV interview on 17th May 2007 ( that the Fund's money can be used on 'all sorts of reasons but probably mainly for legal expenditure.' Could legal fees therefore explain the high costs under the Unrestricted Funds heading?

It would be much more informative to split the items Merchandise and Campaign costs and provide the costs of each; they are quite unrelated cost items.

In the 2011 accounts in Note 2 it states that no director received any emoluments. It does not state this in the 2012 accounts or in those prior to 2011. Does this mean that the directors received emoluments in the years where it is not specifically stated they did not, and if so, where in these accounts are the emoluments charged?

In the 2009 and 2010 accounts, the Directors' Report referred to the ongoing libel case against Dr Amaral, the former lead co-ordinator on the team investigating Madeleine McCann's disappearance. The McCanns obtained an injunction against Dr Amaral in September 2009 which prevented any further distribution of his best selling book 'The Truth about a Lie' published in July 2008. They claimed the book libelled them.

However Dr Amaral appealed the injunction and was successful in the Portuguese High Court in October 2010, and again in March 2011 when the McCanns appealed to the Portuguese Supreme Court. The McCanns' libel case was finally due to start on 24th January 2013 but earlier in the month it was officially 'suspended' so that the parties could negotiate. If there is no agreement after six months of negotiations, the case will continue.

It is hard to understand why there is no reference in the Directors' Report to the libel case against Dr Amaral. If it had never been mentioned, on the basis that the case was taken by the McCanns personally and the Fund had no role in it, that would be understandable, but reporting on it in two sets of audited accounts and then dropping it when the libel hearing is imminent, is strange. It is unclear, whether the Fund ever contributed towards the legal costs of this case, as the published accounts since the McCanns took the action, give no expenditure breakdown.

The Directors' Report also states that the Fund 'provided part-time administrative support to aid the investigation and campaign to find Madeleine (campaign co-ordinator and media liaison)'. However Note 2 to the accounts on page 8 states that there were no employees in the year (and none in 2011). While the media liaison support probably refers to Mr Clarence Mitchell who has acted as the McCanns' spokesman for some time and his services would be paid for on an invoice basis, the administrative worker would be an employee. I commented in my earlier report about the mystery of the Fund Administrator appointed from the start according to the official website. After my report was published on several people contacted the website suggesting that the Fund Administrator might be Ms Karen McCalman. Her LinkedIn profile which I printed out on 11th December 2012 states she has worked as Campaign Manager for the Fund 'from March 2009 to date (3 years 10 months)' and details the range of work she undertakes for the Fund:

  • Liaising with and organising various groups of volunteers to ensure projects are completed in a timely manner
  • Managing the Find Madeleine website and implementing new ideas
  • Providing clerical and administrative support to the McCanns
  • Organising meetings, and follow up with reports, minutes
  • Storing and maintaining information and compiling databases
  • Sort, prioritise and respond to incoming correspondence
  • Stock control & fulfilment of internet orders
  • Maintain financial records and bank all donations received
  • Letter writing and mail merge
  • Providing copy for press and internet releases
  • Conducting basic research
  • Fundraising
Why therefore do the audited accounts say there are no employees? The duties detailed above are clearly those of an employee and not those of an external professional working for a range of clients. Why is Ms McCalman's name, email and other contact details not given on the website which she manages, according to the duties listed above? Why did the Directors' Report in the 2009 accounts signed off on 6th January 2010 not mention her appointment when she commenced in March 2009 and thank the outgoing person, whoever that was? Ms McCalman would surely be reporting to Director Kate McCann on a regular basis as she is the director who has a hands on role in the Fund? The other directors would presumably see Ms McCalman at meetings and be receiving minutes from her.

Contrast this silence with Missing People's website; it contains photographs and a short biography of each member of their management team.

Could Ms McCalman have been doing the work on a voluntary basis? No, because the official website states that the Fund 'has paid for' administrative support and the Directors' Reports in the accounts for the years 2009 – 2012 inclusive state that the Fund 'provided' administrative support.

Her 11th December 2012 LinkedIn printout recorded that from July 2012 as well as working for the Fund, she worked for another company as Project Manager, presumably meaning that her role with the Fund had been scaled down.

However, when I checked her LinkedIn page on 24th January 2013 when preparing this report I discovered that her CV now records that she left the Fund in August 2012 and that her starting date with the new organisation had been changed from July 2012 to August 2012. Now it's understandable if a mature worker puts together a CV covering many years that an inadvertent error in dates could arise for an old position long vacated. It's surely very strange that someone updating a LinkedIn page in December 2012 could make an error about their current work status. While people may be creative with their CVs to hide a gap in employment for example, it's hard to explain these date discrepancies. And since the Directors' Report was signed off on 21st December 2012 why did it not mention the Fund's Campaign Manager had left in August 2012 and thank her for her work?

Incidentally, Ms McCalman describes herself as the Fund's Campaign Manager while the official website always described the position as the Fund Administrator. The Directors' Report calls it the Campaign Co-ordinator. Clearly the three titles refer to the same role, but it is a little confusing.

Turning to Income, out of a total of £856,393 (2011 - £177,534) we are told in Note 7 – Related Party Transactions that £738,487 has been donated by Kate McCann from post tax royalties and other income from sales of the book. Given that these donations were after tax had been paid, the gross amount received from the book was clearly over £1 million.

Deducting the book donations from the total income gives other income of £117,906 but there is no information in the accounts to tell us how this is made up. In 2008 when the accounts did give some detail, the sales of T-shirts and other merchandise totalled £64,078. The actual profit would have been much less after deducting the cost to the Fund of the goods. It is unlikely that current sales were anything like that. A corporation tax charge of £5,128 suggests that there was taxable income of £20,000 or so. Possibly that taxable income solely related to merchandising profits. Donations are not liable for corporation tax.

The official website does not mention any fundraising activities in 2012; there were three mentioned in 2011. The Directors' Report states 'the amount of time given up, the numerous messages of support sent to Madeleine's family and donations to the Fund, have been overwhelming.' The equivalent sentence in the 2011 report did not mention donations and it is hard to see why donations would have been overwhelming in 2012 particularly when the Metropolitan Police Review started in May 2011. Thus the source of the majority of the £117,906 other income received is unclear.

The accounts record interest receivable of £149. Given the income of £856,393 for the year, the surplus for the year of £349,692 after taxation and the fact that there was £528,267 in the bank at the end of the accounting year 31st March 2012, surely basic money management would have resulted in significantly more interest? Another possible explanation is that the substantial book donations were not made until near the end of the accounting year, which begs the question where the money was before it was lodged.

In my last report I commented that the book contract was signed in 2010 and at least part of the substantial (but not specified) advance royalty payment would have been paid in 2010 yet it did not appear from my analysis of the accounts for the year ended 31st March 2011 that it had been lodged to the Fund. The book cover stated 'all royalties donated to Madeleine's Fund.' And, the Directors' Report for the year ended 31st March 2011 stated that in view of declining income Dr Kate McCann decided to write a book about Madeleine's disappearance and that 'all royalties from the book will be paid into Madeleine's Fund to ensure that the Fund is able to continue the search for Madeleine.'

The balance sheet records that £528,267 was in the bank at 31 March 2012 but unfortunately we are not told by way of a note whether the majority of the money was in an interest bearing account. Given the admitted winding down of the Fund's investigation, there would be no large bills to be paid out, so cash reserves could be tied up short term to maximise interest.

These accounts and the earlier ones all contain the sentence 'in as far as it is relevant the Fund follows best practice governance procedures as set out in the publication "Good Governance A Code for the Voluntary and Community Sector".'

This code was established in 2005 and updated in 2010 and is available at It has six basic principles and the last one, principle six, is relevant here. It states that 'an effective board will provide good governance and leadership by being open and accountable.' The home page of the official Madeleine McCann website requests donations and has a Paypal button. To comply with principle six, the website should surely provide current financial information, and the filed accounts should provide sufficient detail to reassure donors that their money is being properly spent on the search for Madeleine McCann.

The 2012 Audit Report does not include two sentences which were contained under Scope of the audit of the financial statements in the 2011 Auditors Report:

'In addition we read all the financial and non financial information in the Directors' report to identify material inconsistencies with the audited financial statements. If we become aware of any material misstatements or inconsistencies we consider the implications for our report.'

This is interesting because these sentences were new in the 2011 Audit Report. It is appropriate that auditors review the Directors' Report for inconsistency with the audited financial statements. In my opinion in 2011 there were inconsistencies between the Report and the audited financial statements; namely the issue of (not) following the Governance Code where relevant, and the apparent inconsistency between the reference to providing administrative support and the accounts note in 2012 saying there are no employees in 2012 (2011 none). Clearly the auditors did not consider these inconsistencies to be 'material' or they would have reported on them. In my opinion these inconsistencies also apply in 2012, but the Auditors' Report no longer stated that they read the Directors' Report to identify material inconsistencies.

Finally I have to point out that in Note 2 on page 8 the accounts incorrectly state that the operating deficit is stated after charging £6,300 for the auditors' remuneration. The problem is that it wasn't a deficit; there was an operating surplus of £354,761! A similar error was made in the equivalent note in the 2009 accounts: a deficit was described as a surplus! A pity that none of the directors or the auditors spotted this!

As in my report on the earlier accounts, review of these long awaited 2012 accounts raises many questions to which the answers, to say the least, are not obvious. Transparent is not a word I would use to describe the 2012 accounts.

©   Enid O'Dowd   29 January 2013

Brian Kennedy publicly requests money for legal expenditure, 17 May 2007
Brian Kennedy publicly requests money for legal expenditure YouTube

Originally broadcast on BBC - East Midlands Today, 17 May 2007


By Nigel Moore

Kathy Rochford: (to camera) Here in Rothley, the sea of yellow ribbons, the mountain of soft toys behind me grows ever larger. Now, as you say, it's been two weeks tonight that Madeleine was taken from her parents apartment and yet still people come here today, streaming through, reading the messages of support. Some of them reduced to tears by the notes left by children. Now among the visitors today was Madeleine's Scottish grandmother and I spoke to her just before she flew back to Scotland and she told me that she had just spoken to her son Gerry in Portugal. This is what she said about him.

Eileen McCann: Feeling a lot brighter and better in his voice and I think us being here with the family and the fund starting, that's uplifted him and his doctors from the hospital, especially Doug Skeehan, who's his immediate boss, he's been just wonderful. Good uplifting news. So that's probably made his voice a bit brighter; not as anguished, and that's what I found in him today.

Kathy Rochford: (to camera) Well, that's how events here are buoying up the family in Portugal but I'm joined now by Madeleine's great uncle, Brian Kennedy, and he's going to tell us about the fighting fund. Errm... what's been the public's response to it, Brian?

Brian Kennedy: Well, it's been very good, so far, but a lot of people have said they're not quite sure how they can give money, so may I tell them?

Kathy Rochford: Yes, very briefly.

Brian Kennedy: Right, very briefly, you can go into any branch of the NatWest, or the Royal Bank of Scotland, and just say that you would like to make a contribution to the Madeleine Fund.

Kathy Rochford: Well, tell me Brian about all the people that have been coming up to you today, just literally stuffing money in your hand.

Brian Kennedy: (laughs) Yes, they have. It's... it's very touching, very touching. I... I... I would just say this is not an appeal; the family haven't made an appeal. We've just set up a mechanism for people who said they wanted to do something and contribute, so that the money can be used, errr... for all sorts of reasons but probably mainly for legal expenditure.

Kathy Rochford: And, of course, there is the video and you want that to have saturation coverage, don't you?

Brian Kennedy: We do, it's, errr... gone out and it's very widespread already, errr... we're particularly concerned that it should reach as many countries as possible.

Kathy Rochford: Okay, Brian. Thank you very much indeed for talking to us. (to camera) As I said, you can see here all the yellow ribbons. That is a testament of what people feel like. They really want to pay tribute to Madeleine; want to see her back home, safe and well.

With thanks to Nigel at McCann Files


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