Select Committee on Standards and Privileges Appendices to the Minutes of Evidence

Annex A

Leicester East Constituency Labour Party, Auditors' Report

The auditors are unable to sign the accounts as a true record, because of the major qualifications which are listed underneath. These will need to be resolved before the accounts can be signed. We therefore recommend that the accounts are not approved or accepted until this is done.

1.  The accounts have not been presented in an acceptable manner. The statement is an income and expenditure summary, not a balance sheet. The significance of this is shown by the failure of the accounts to explain what has happened to the brought forward deficit. It is unclear whether this remains an unpaid debt, whether it has been paid of by an unnamed benefactor, or whether it has been written off (or a mixture of all three). A balance sheet should be an accurate explanation of the financial situation of an organisation, and such an explanation is missing from these accounts.

2.  The Constituency Labour Party took over the control of membership for the year of 1990. It is therefore essential that proper membership records are contained within the accounts. We have not been given these membership records, despite requesting these from both the former Treasurer, and the current Secretary. Membership fees form a major portion of the payments made into the two bank accounts, which we are unable to verify in the absence of membership records.

3.  In addition to the absence of membership records, there is no adequate method of recording payments made into the bank accounts. Again it is therefore impossible to verify payments made into the accounts. The absence of proper paying in records is made much worse by processed paying in slips not being returned by the banks. We suggest that arrangements should be made with the banks to return paying in slips after processing, to assist auditing being properly carried out.

4.  Payments to reimburse an officer have been made without proof of expenditure. This is most unsatisfactory, and the C.L.P. should confirm that it is not appropriate to meet expenses undertaken by officers without receipts being obtained. Most items of expenditure can easily be receipted, for example postage and stationery. Where phone calls cannot be receipted, these should be logged so that there is some record of how a figure is arrived at, and justified.
Pat StuttardPaul Gosling
Leicester C.L.P. auditors 14 February 1991

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