Facade of the Court of Auditors in Madrid.Jaime Villanueva
The Court of Auditors has called for more scrutiny of foundations linked to political parties, after noting in its last report on the activities of these bodies that half of them have not submitted their annual accounts for 2018 and 2019 on time, and in some cases have didn’t even provide information about their accounting. For this reason, the Foundation Control Report proposes to better guarantee this work through a series of measures, including the establishment of a minimum amount above which the data of the foundations are to be reported within a maximum of three months they receive, in particular from legal entities.
For the first time, the Court of Auditors’ report looks at the activities of 51 party-affiliated foundations separately. One of the main conclusions of this audit work is that in 2018 only 23 of the 51 foundations and corporations mentioned submitted their annual accounts on time, 22 of them outside the statutory deadline, which ended on June 30 of the following year. . . On the other hand, six of them did not submit an invoice, so the court could not examine their financing. In 2019, 16 foundations and corporations submitted their financial statements on time, 26 after the deadline and nine did not. Therefore, it is proposed to introduce the mandatory deadline mentioned above in order to comply with this legal obligation.
The document also shows that 19 of the 51 foundations and political bodies audited remained dormant in 2018 and 2019, and that several of them agreed to their dissolution and deletion in subsequent years. In addition, six of them had negative assets at the end of the 2019 financial year. Consequently, the report proposes to “adjust” the economic activities of the foundations and to do this “establish a recovery plan in order to achieve the necessary asset adjustment in the presence of negative assets”.
The Court of Auditors, on the other hand, found that only 21 foundations affiliated with political organizations out of the above total of 51 analyzed foundations were registered in the special section of the Register of Political Parties, although all of them do so pursuant to Article 100(1)(1)(b) of the Prospects of the Law on Political Parties from 2002 itself.
In view of this situation, the supervisory authority proposes that, as a prerequisite for participation in tenders for public grants addressed to foundations and institutions affiliated with or dependent on political parties, the “mandatory registration of these persons in the special section of the register of political parties” to demand parties”. He also believes it is necessary to require that such registration “indicate the nature of the relationship, the commercial relations between both organizations and the activities to be carried out by the foundation or corporation”.
As for private grants and donations, the audit shows that they totaled 2 and 1.6 million euros respectively in 2018 and 2019, with a downward trend (they received 2.7 million euros in 2017). The report highlights a number of violations, including “donations deposited into ordinary bank accounts without opening special accounts for the purpose” and “donations from legal entities without the consent of the competent social institution”. The existence of “money deliveries from cooperation agreements not reported to the Court of Auditors” and donations from legal entities that were not reported to the supervisory authority within three months of acceptance are also checked.
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On the other hand, the total donations from foundations and political bodies in 2018 and 2019 amounted to 3.3 and 3.1 million euros respectively. The Court of Auditors emphasizes that “in cases where the verification reveals ineligible expenditure, the ministries or the grant awarding bodies will be informed in order to request the corresponding reimbursement”. The supervisory authority further states that a total of 24 foundations and seven political bodies did not publish the annual financial statements for the 2018 and 2019 financial years on their website, contrary to the provisions of the regulations, nor did they publish the results of the audit report.
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