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| Accounts reveal libel trial witnesses had their expenses paid from Madeleine's Fund |
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| Tony Bennett speaks outside the Royal Courts of Justice, 21 February 2013 |
Enid O'Dowd analyses the accounts of Madeleine's Fund:
Leaving No Stone Unturned Limited for the year ended 31 March 2013
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 2013, and of issues arising from that analysis,
14 January 2014
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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 2013, and of issues arising from that analysis
By Enid O'Dowd FCA
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'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)
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This analysis of the 2013 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 year ended 31 March 2012
and on issues arising from that analysis,' both available at
http://www.mccannfiles.com/id405.html
The 2013 accounts were received in Companies House on 31 December 2013, the last possible filing date to avoid
a fine. The accounts for the year to 31 March 2012 were filed late incurring a fine of £150. Earlier accounts were always
filed close to the legal deadline – so much for the highest standards of transparency. The audited accounts and other
financial information are not on the official website http://www.findmadeline.com/
The accounts for the year ended 31 March 2013 were signed off on 20 December 2013; accounts for the year ended
31 March 2012 were signed off on 21 December 2012.
Directors' Report
The Directors'
Report is similar to last year's with the addition of the paragraph below:
'The Fund has covered expenses
for witnesses giving evidence in a libel trial in Lisbon against Goncalo Amaral (former coordinator of the Portuguese investigator
to find Madeleine). Mr Amaral published a book in 2008 and produced a documentary and DVD in 2009 which claimed Madeleine
was dead and that her parents faked an abduction and concealed her body. This has caused vast damage to the search for Madeleine
in Portugal (where it is most likely that information relating to Madeleine’s abduction and whereabouts will come from.)
The Board felt that an attempt to halt this damage was vital in order to further the search for Madeleine hence taking this
course of action.'
The Report states that the Board meets regularly to review strategy and to review ongoing
expenses. Five meetings were held in 2012/2013, eight in 2011/2012 and eleven in prior years. A meeting on average once every
ten weeks is not my idea of 'regular.' The Report also states that after the closure of the investigation in 2008
'Madeleine's parents had several meetings with successive home secretaries to request a review of her case.' How
many is several, I wonder? There were three Home Secretaries in the period from 2008 when the Portuguese police archived the
case to May 2011 when the Metropolitan Police Review was approved by the Prime Minister. They were Jacqui Smith, Alan Johnson
and Theresa May. It's interesting that the Report was not more specific. Why not say that the parents met this Secretary
once, this one twice and the other one twice as the case may be?
Income & Expenditure Account
Extract from the audited accounts –
Income and Expenditure Account for the
year ended 31st March 2013
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Merchandise and Campaign Costs
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Gross Surplus/(Deficit)
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Administration Expenses
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Operating Surplus/(Deficit)
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Profit/(Loss) on ordinary activities before taxation |
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Tax on surplus on ordinary activities |
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Surplus/(Deficit) for the year |
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Note the change in terminology. Surplus and deficit are normally used for charity and not for profit accounts.
The accounts use this terminology for two sub totals, change to Profit/ (Loss) and then revert to surplus and deficit again.
This inconsistency was also seen in the accounts to 31 March 2012.
In the accounts for the year to March 2012,
for the first time, Income and Expenditure was divided into Restricted and Unrestricted Funds.
Restricted Funds
(see Note 5 on page 8) are for 'the direct costs of the search for and the investigation into the disappearance of Madeleine.'
Interestingly the auditors' note again uses the word 'disappearance' rather than 'abduction' which is
the word used by the directors in their Report.
As I commented in my review of the accounts to March 2012 this
change of accounting presentation puzzles me because it seems the Fund essentially has only 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.
Income is hugely down over the previous year and no indication
is given in the notes to the accounts as to how the £70,250 income is made up. Presumably this is mainly royalty income
from book sales together with fees from interviews. In note 7 to the accounts for the year ended 31 March 2012 we were told
that £738,487 relating to royalties and other income from sales of the book had been donated to the company. No mention
of donated royalties is made in the notes to the accounts under review – which is surprising if the income figure does
include royalties.
Dr Kate McCann was made an Ambassador to the charity Missing People in July 2012. There was
speculation that she was receiving fees for this role. However the Press Office of the charity assured me she was not receiving
fees when I raised this question. Thus, the income figure does not include fees from Missing People.
Possibly some
fund raising income is included though the company's website makes no mention of any activities in this regard. Dr Kate
McCann has taken part in sponsored runs but these were for Missing People.
The only other possible source of income
is donations from the public which seems unlikely in the context of the tax payer funded review of Madeleine's disappearance.
Total expenditure was £139,019 (merchandise and campaign costs £115,109 + administrative expenses £23,910).
This will include the telephone line service, the Portuguese communications service and the awareness campaign all
referred to in the Directors' Report. It should include the part-time administrative support listed in the Report but
the problem is that Note 2 on page 8 states there were no employees, and none in the previous year. There has never been information
on the official website naming the promised Fund Administrator apparently appointed at the start or the now part-time administrative
assistant.
As I commented in last year's review 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. You would have expected the directors to consider this option so that there would be no
financial deterrent to the public phoning in leads to the Fund hotline.
The libel trial didn't start until
September 2013, six months after the year end, so witness expenses would not have been incurred in the year. The directors
were presumably referring to witness expenses being a current cost at the time of signing off the accounts on 20 December
2013. It was reported that in January 2013 there were attempts to settle the libel case before it came to court. The McCanns
may have travelled to Lisbon to meet with their Portuguese lawyers in this connection. If they did, their travel, accommodation
and subsistence expenses would presumably have been charged to the company.
The big question is, does the expenditure
include legal fees?
The Directors' Report refers to the ongoing legal case and paying witness expenses but
does not refer to paying legal fees. However given the Board's stated view that the book, documentary and DVD caused vast
damage to the search it would be perfectly legitimate to pay the fees relating to this case from the Fund.
Why
do they not state that they are paying the legal fees if this is the case?
Director Brian Kennedy (Kate McCann's
uncle) said in a BBC TV interview on 17th May 2007 (http://www.youtube.com/watch?v=w4jsLkwa7cc) that the Fund's money can be used on 'all sorts of reasons but probably mainly for legal expenditure.'
Were any of the legal expenses relating to the case taken against Tony Bennett which started in 2009 and was finalised in
this accounting year paid from the Fund?
While the McCanns won the case in the High Court in February 2013 and
Mr Bennett is permanently banned from writing or speaking about the case, a settlement was reached in April 2013 whereby most
of the McCanns' legal costs of around £370,000 were written off and Mr Bennett agreed to pay £27,500 (£12,500
upfront and £15,000 by monthly payment over 10 years) with a further £47,500 becoming immediately due if he should
break the injunction. While Carter Ruck, the libel lawyers acting for the McCanns, may have agreed to waive some costs, it
is unlikely that such a large sum would have been. Therefore the McCanns, privately or through the Fund, presumably must have
paid some of these substantial costs. The Directors' Report makes no reference to the Bennett case. Can one presume therefore
that no legal costs were paid out of the Fund? The jury is out on that question.
Cash management is not impressive.
The accounts record interest receivable of £323. Given that cash at bank was £528,267 at 31 March 2012 and £441,169
at 31 March 2013, even allowing for outgoing expenditure of £139,019 surely more interest should have been generated?
It is interesting to look at total Income and Expenditure since the company was incorporated six years ago.
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Madeleine's Fund: Review of audited accounts from commencement
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Income
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Interest receivable
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Merchandise/
Campaign Costs |
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Admin. Expenses
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Operating Surplus/
Deficit |
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Taxation
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Surplus/Deficit for year
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Audit
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Income is close to £4 million and expenditure £3.5
million. £44,185 has been paid in audit fees and £25,681 for corporation tax. The company had a refund of corporation
tax relating to 2012/2013 due to the loss for the year.
These accounts and the earlier ones all contain the sentence
'in as far as it is relevant the Fund follows best practice government 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 http://www.governancecode.org/ 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 for the period of these accounts also displayed 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.
There have been rumours
in recent weeks that the Fund was closed. They arose for two reasons; firstly because the online store page of the official
website was unavailable for seven weeks, thus making it impossible to donate over the entire Christmas period, and secondly
because of claims that the bank was no longer accepting donations to the Fund over the counter and others that the bank account
itself was frozen.
At the time the online store was withdrawn, the company was using Google Checkout, rather than
PayPal, to process payments. The changeover, which occurred on 19 April 2013, saw a range of donation buttons of pre-determined
value, from £1 to £100, added to the online store page. Just a month later, on 20 May, Google announced they would
be retiring their Checkout payment system, thus allowing merchants six months time to put an alternative in place. It seems
clear, from what followed, that for those six months the site webmaster took no decisive action. Thus, in the week before
Google Checkout was due to be retired, on 21 November, the company was left with no option but to remove the online store
from the site. Google had not offered a replacement product but did recommend an alternative payment processor, Braintree
Payments, who stated they could integrate their payment system in an hour. Inexplicably, it took a further seven weeks for
the store and donation button to reappear.
It remains a mystery why no decision was made to simply revert to PayPal
at the time Google Checkout was retired, even if only a stop-gap basis to maintain donations. The companies PayPal account
must have remained active because the German version of the Find Madeleine site was still accepting payments by that method,
even when the online store had been withdrawn from the three other language versions of the site.
On 9th January
2014, the online store was relaunched, both on the official site and also on a new standalone site at http://shop.findmadeleine.com/. The new site rather curiously contains 'sign in' and 'register' buttons, which the site defends by stating
that it 'helps us make your shopping experience easier'. A peculiar claim given there are only six products for sale,
on one page! Unless there is a long term plan to introduce an extensive catalogue of Madeleine merchandise, this would seem
to be little more than an exercise in collecting personal details. But for what purpose?
To investigate the claims
regarding the company account with the NatWest bank, I made a £1 donation by bank online transfer from my account in
Ireland. The money went through!
A friend of mine in the UK, a NatWest customer, raised the issue with the bank
who confirmed to him that the account is open. The bank said that the only reason that some donations may have been rejected
at the counter is that the staff were unaware of the account. Certainly it seems credible that six years after the Fund was
set up, and with dwindling donations and the natural turnover of staff, most front-line bank staff would have never previously
encountered an individual wishing to donate to the Fund.
I had hoped that these long awaited accounts would give
even a little more information than before.
According to the website of company auditors haysmacintyre, 40% of
their fee income is derived from their over 600 clients in the charity and not for profit sector. They have been rated in
the top four firms for both 'Overall Service' and 'Charity Expertise' for seven consecutive years by readers
of third sector magazine Charity Finance. In the 2013 survey haysmacintyre retained the number one 'overall service award'
and was also voted as a leading firm for 'charity expertise' for the third year in a row.
I wonder how
they feel as experienced finance professionals at having a client (The Fund) who asks them to file the minimum information
required by law despite requesting donations from the public, and who doesn't sign off their accounts until close to the
deadline for filing. The Fund accounts were signed off by the Board on Friday 20 December the day haysmacintyre were presumably
closing for Christmas.
As someone who has been involved in a professional capacity with the not for profit sector
I have to say I would rather lose my fee than produce uninformative accounts that follow the letter rather than the spirit
of the law.
(c) Enid O'Dowd
12 January 2014
www.enidodowd.com
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See also:
Madeleine's Fund - Review &
Investigation of Accounts
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Madeleine's Fund - Analysis of the
accounts year ended 31/03/2012
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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
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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
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Screenshots related to the accounting
period for year ended 31 March 2013
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Home Page for findmadeleine.com, with
PayPal button, during 2012/2013 accounting period
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madeleine by Kate McCann released
in paperback and on Audiobook [not mentioned in Directors' Report], 09 May 2012
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Find Madeleine Team announcement, 17
June 2012
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Text version of above:
Find Madeleine
Team
Since the Metropolitan Police began their review of Madeleine's case in May 2011, thankfully
the demands on ourselves and our investigators have reduced. However we still have (and need!) a small team of very committed
and experienced people working hard to help us find Madeleine and others available to step in and assist should the need arise.
The 24-hour 'hotline' for people to call with information is still functioning on 0845 838 4699 for people
who would prefer to contact us directly.
Along with a campaign coordinator and translators/interpreters, the team
has several individuals with invaluable marketing, advertising and I.T. skills who help with the general campaign to find
Madeleine.
Of course probably the biggest and most valuable resource we have in our search for Madeleine is the
eyes, ears and minds of the general public. Thank you to everyone who has, and continues to help us with our efforts to find
her. Please keep going!
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The McCanns v. Tony Bennett 
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Screenshots related to activity after
the end of the 2012/2013 accounting period
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Online Store changed to Google Checkout,
19 April 2013
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Libel trial witnesses for the McCanns who
had their expenses covered by Madeleine's Fund
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Libel trial witnesses for the McCanns who had their
expenses covered by Madeleine's Fund
Top row: Susan Hubbard, Emma Loach, Dave Edgar
Middle row: David Trickey, Angus McBride, Susan Healy
Bottom row: Alan Pike, Michael
Wright, Trish Cameron
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12 September 2013
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Witnesses:
Susan Hubbard
- from Glenburnie, Canada
Emma Loach - from London, England
Dave Edgar - from
Cheshire, England
Other possible expenses:
Kate McCann - travelled from UK
(likely overnight stay as she also appeared at court following day)
Susan Healy - Kate's mother
(likely overnight stay as appearing in court following day as a witness)
Trish Cameron - Gerry's
sister (likely overnight stay as appearing in court following day as a witness)
David Trickey - Overnight
stay? (appearing in court following morning as a witness)
Angus McBride - Overnight stay? (appearing
in court following morning as a witness)
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13 September 2013
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Witnesses:
David Trickey -
from UK
Angus McBride - from London, England
Susan Healy - from Liverpool, England
(not heard)
Trish Cameron - from Scotland (not heard)
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19 September 2013
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Witnesses:
Alan Pike -
from UK
Other possible expenses:
Cláudia Nogueira - from Portugal (?
expenses)
Michael Wright - Overnight stay? (appearing
in court following morning as a witness)
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20 September 2013
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Witnesses:
Michael Wright -
from Skipton, UK
Other possible expenses:
Isabel Stilwell - from Portugal
(? expenses)
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27 September 2013
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Witnesses:
Trish Cameron
- Gerry's sister (possible overnight stay previous night as due to
be appearing in court this morning but not heard)
Other possible expenses:
Gerry McCann
- Attended court but was not heard (possible overnight stay previous night)
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02 October 2013
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Witnesses:
Trish Cameron
- Gerry's sister (possible overnight stay previous night as appearing
in court this morning)
Susan Healy - Kate's mother (possible overnight stay previous night as she
was expecting to be appearing in court this morning but was not heard)
Other possible expenses:
Gerry McCann - Attended court but was not heard (possible overnight stay previous night)
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'We are updating our online store'
- notice ahead of Google Checkout being retired, 16 November 2013
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Official Find Madeleine Campaign: Statement
on unavailability of online store, 07 December 2013
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[Text version of above]
Saturday,
7 December 2013 at 15:58
We've had questions regarding our online store being unavailable and when will
it be available again. Google Checkout was retired on 21 November. Because Google Checkout is no longer available, we are
redesigning our online store with another merchant system. I'm finishing the design/setup and will have the online store
available soon. Thank you for your patience while we make this change.
If you have any questions, please Email
me at Webmaster@findmadeleine.com. ~FM Webmaster
Note:
On 20 May 2013,
Google announced that Google Checkout would be retiring in 6 months time. Merchants were advised they could continue to accept
payments up to that date, 20 November 2013, whilst they sourced and implemented an alternative payment system.
Google
did not offer a replacement product but stated that they were 'partnered with three premier players in the payments industry
to offer alternatives for your eCommerce needs'.
Payment processing was offered through Braintree Payments,
who, according to their website, are prepared to offer Google Checkout Merchants 'a lifetime discounted price' and
are able to integrate their payment system in an hour.
An update to Google Checkout for merchants Google Commerce
20 May 2013
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Find Madeleine Online Store relaunched,
09 January 2014
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Text version of above
Thursday,
9 January 2014, at 23:10
We have relaunched our online store. Here you will be able to purchase holiday
packs, t-shirts or make a donation.
If you have any questions or issues with the store, please Email me at Webmaster@findmadeleine.com.
http://shop.findmadeleine.com/
Welcome
to the Find Madeleine Online Store shop.findmadeleine.com
The new standalone online store contains a 'sign in'
facility, which the site claims 'helps us make your shopping experience easier':
The online store also remains accessible through the official
Find Madeleine site:.
Online Store findmadeleine.com
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