Questions over finances of Stormont's parties fuel calls for transparency

NEW questions have emerged over how Northern Ireland’s political parties report their financial information after an examination of their latest accounts by The Detail.

A key finding revealed incorrect dates were used to sign-off auditors’ statements verifying DUP and Sinn Féin annual accounts for 2015, which the parties are legally obliged to submit to the Electoral Commission.

The inaccuracies, which were discovered by The Detail, were subsequently blamed on typos and there is no indication of wrongdoing by the parties or their auditors.

However, the analysis also raised questions over information included in the annual accounts for all the parties elected to Stormont.

The Detail has previously reported extensively on the secrecy around donations to Northern Ireland parties, as well as inaccuracies in how election spending is reported to the authorities, but today’s findings reveal discrepancies in how parties report their routine running costs.

This comes as The Detail can reveal that the Electoral Commission is introducing a new reporting system to standardise how parties submit their financial information to the official watchdog in order to allow for a more meaningful comparison.

The most recent central party accounts available on the Electoral Commission’s website relate to 2015. They are reported by calendar year as opposed to financial year and show that three parties posted a surplus between their income and expenditure, while five parties recorded a deficit.

Those in surplus were the UUP with £102,192, the DUP with £21,916 and the Alliance Party with £18,916. Those in deficit were Sinn Féin with -£52,480, the SDLP at -£57,147 and the Green Party at -£4,393.02, while People Before Profit was -£260, and the TUV ended the year -£3,516.

The analysis of the various party accounts revealed:

SDLP

• The SDLP spent £139,986 on consultancy fees in 2015 – over 15 times more than the £8,775 it spent the previous year.
• The SDLP’s running costs of £412,146 in 2015 were more than £173,000 higher than in 2014. Of the amount spent in 2015, £15,000 was used for legal and professional services and £27,079 on organisational and development costs while nothing was spent on these areas during the previous year.
• The party’s accounts state it “relies on donation income to meet a large proportion of its expenditure”. Its donations more than doubled in 2015 when it received £185,685 from £75,819 in 2014.
• The SDLP reported a £275,000 leasehold asset in its 2015 accounts, which its submitted records indicate relates to its headquarters on Belfast's Ormeau Road.

Asked for further information on these points, the party said: “The SDLP makes full declarations on income and expenditure as required by the Electoral Commission. The course of the last number of years has seen a marked increase in elections which has resulted in an increase in relative spend. The details of spend and services contracted are an internal party matter.”

The SDLP also called for a full review of political party funding and full transparency over donations.

UUP

• The UUP’s 2015 accounts described its former headquarters Cunningham House on Holywood Road, Belfast, as the party’s most valuable asset. They also said the party set up Cunningham House LLP in 2008 to manage the rental of the asset and the UUP holds a 70 per cent share in the company, worth £816,308. The building is worth just over £1 million, according to the latest accounts of Cunningham House LLP.
• Planners approved a proposal to build 25 apartments and a separate office building on the Holywood Road site in 2011 but this permission has since lapsed. An application to renew the planning consent was submitted to Belfast City Council in March 2016 and a decision is pending.

The UUP said in relation to its headquarters: "This is the only property held by the party centrally. Other properties are held by individual constituency associations.”

The party confirmed, as indicated in the documents, that there are plans to develop the site at its former headquarters.

It also said that it includes information on income received from its representation at Westminster in its central party accounts.

SINN FÉIN

• No property assets were declared in Sinn Féin’s accounts but it has listed three properties in its southern accounts – two in Dublin and one in Belfast – with a combined value of €1.6million.
• Sinn Féin contributed £65,945 to its candidates in 2015 from its central party accounts, up from £39,124 in 2014.
• The party reduced its spending on legal and professional costs from £44,936 in 2014 to £16,933 in 2015.
• The cost of its Uniting Ireland Department halved in 2015 to £6,065 from £13,678 in 2014.
• The accounts said the party spent £15,513 on its press office in 2015, up from £9,132 in 2014.
• The auditor's signature included in Sinn Féin’s accounts for 2015 was inaccurately dated six months before the year-end in July 2015.

A spokesperson for the party said: “This is of course a typo. It should read 1st July 2016.” He did not comment further on its northern accounts.

DUP

• The DUP reported an asset of £250,000 but did not provide any additional information about what it relates to.
• The DUP had no internet expenses in 2015 despite spending £15,206 the previous year, while its repairs and maintenance bill increased from £742 in 2014 to £18,442 in 2015.
• Expenditure on DUP conferences rose from £33,384 in 2014 to £64,838 in 2015 yet income from conferences fell from £68,130 to £57,809.
• The DUP spent more than double on research in 2015, reporting expenditure of £116,057 compared to £53,151 in 2014.
• The auditor’s signature included in the DUP’s accounts for the year ending December 2015 was inaccurately dated 17 months earlier in June 2014.

The DUP failed to respond to several requests for a comment but The Detail spoke to the auditor of the party’s latest accounts who confirmed the wrong date was included in the audit statement due to a ‘typo’.

The spokesperson said it had approached the Electoral Commission to resolve the issue and agreed to send an amended audit. They added: “It was a mix-up with the first draft and the final draft, which was given to the Electoral Commission.”

ALLIANCE

• The Alliance Party holds a 70 per cent share in Lagan Properties (1970) Ltd, according to documents published on Companies House.
• The firm’s sole asset is the party's headquarters on University Street in Belfast which is valued at £120,574, according to the latest accounts from Lagan Properties (1970) Ltd on Companies House.

The Alliance Party said: “Alliance does not own any property. The £21,000 [investment declared in the 2015 accounts] is shares Alliance has in Lagan Properties, a company whose sole asset is Alliance Party HQ.”

TUV

• The TUV earned £10,390 in donations in 2015, just under £5,000 less than in 2014 when it received £15,362.
• The party took in an additional £8,553 from fundraising activities, including a dinner/auction in 2014, while it received just £441 from fundraising in 2015.
• Income listed as being from subscriptions more than doubled in 2015 when it received £2,518 compared to £1,038 in 2014.
• The party spent over 2.5 times more on campaigns in 2014 than in 2015 when they cost £7,451 compared to £19,279 the previous year.

The TUV said it does not own any property, adding: “The TUV finances the vast majority of its campaign expenditure through branch funds which are not covered by the party’s central account.”

GREEN

• Campaigning expenditure fell by nearly half in 2015 when the party spent £12,947.80 compared to £25,655.34 the previous year.
• The accounts said there had been an increase in people joining the party which resulted in an increase in membership income from £5,471.25 in 2014 to £7,778 the following year.
• They also described how an online crowdfunding campaign helped the party raise £2,368.80 for the 2015 General Election.
• The Green's office costs rose from £2,666.76 in 2014 to £4,516.02 in 2015 which the accounts attributed to "mainly in-house printing costs".
• The party's accounts state that its main activities in 2015 were "normal campaigning and operational activities in connection with the UK General Election".

The Green Party told The Detail the Northern Ireland arm of the party does not own any property and that it does not accept corporate donations.

It said: “But, because of sound financial planning, we will be standing more Westminster candidates than ever before.”

And added: “Other parties need to end the secrecy surrounding political funding in Northern Ireland. People deserve to know who is pulling the strings behind the scenes.”

PEOPLE BEFORE PROFIT

• People Before Profit’s accounts included income and expenditure figures under a heading titled ‘2012’ despite the fact they related to 2015. The party said this was a typo.
• It received more in membership fees in 2015 when £5,800 was paid compared to £3,200 in 2014.

The party confirmed it does not own any property and said: “As a socialist party People Before Profit (PBP) does not seek support from wealthy benefactors or big business, nor would we accept any corporate donations. Therefore grassroots fundraising is a crucial part of any election campaign for us.”

People Before Profit also called for donor transparency, adding: “We are concerned about the way in which powerful financial interests are interwoven with political parties, and this is often evident during elections. Ultimately we believe that politics should be about challenging the power of corporations and financial elites. To that end we believe that transparency in donations would allow for some oversight in this sense.”

AUDIT STATEMENT ERRORS

There is no allegation of wrongdoing against the DUP, Sinn Féin or their auditors in relation to the errors in the dates of their audits, but former chairman of Westminster’s Committee on Standards in Public Life Sir Alistair Graham said they should have been identified by the Electoral Commission.

"I am surprised that the Electoral Commission for Northern Ireland has not picked up the deficiencies when this must be a core task of their statutory responsibilities," he said.

The Electoral Commission said: "Parties with income or expenditure over £250,000 are required to have their accounts audited and submit a copy of the auditor’s report with the accounts. This is a statutory duty placed on the party.

"In line with our statutory duties we then publish these accounts. We were not aware of the discrepancies in the audit reports for Sinn Féin and the DUP. We will follow this up with the parties."

The spokesperson would not comment further on what enforcement action, if any, would be taken against the DUP or Sinn Féin.

According to the parties’ latest annual accounts, the DUP had an income of £533,682 and expenditure of £511,766 in 2015 while Sinn Féin reported an income of £1.16 million and expenditure of £1.2 million in Northern Ireland.

FURTHER QUESTIONS

While an examination of the central party accounts provides an insight into how political parties spend their money, it is not the whole picture as it does not reflect the financial position of the organisations' local branches which may report financial information separately.

Parties can choose to submit separate accounts for their financial activities at Westminster, Stormont or their local branches.

These three separate groups are known as accounting units and only need to report financial information to the Electoral Commission when their income or expenditure exceeds £25,000 in one year.

Just four parties declared the number of accounting units they have in their latest central party accounts. The Ulster Unionist Party said it has 41, followed by the SDLP with 20. Sinn Féin and the Alliance Party have 16 and 15 respectively.

The finances of these groups are not directly managed by the parties' headquarters, and only donations and loans over £1,500 are required to be declared compared to £7,500 for central party accounts.

Such accounts can provide additional information on parties, for example, a financial statement was also submitted by the East Belfast Ulster Unionist Association and branches in 2015 which reported a consolidated income of £41,710 from four groups - £32,150 of which was attributed to property rentals.

The document listed the party’s Strandtown Hall headquarters, in East Belfast, as a fixed asset with a value of £175,825. The group also reported an additional £190,129 in investments.

Economist John Simpson told The Detail: "In an open and well-developed society, there is a wide public interest in the influence, funding and funders of political processes. It is, therefore, helpful that the main accounts should be publicly available and then scrutinised independently.

"In Northern Ireland, the published accounts need to be timely, reliable and well documented. We have gone a long way to do just that, although there is more to be expected.”

The Detail has created a database to show how parties reported their latest financial information from their Stormont, Westminster and central party operations here.

• In a separate story published today we examine how the DUP paid a technology company - which played an influential role in the EU referendum - for services during the March 2017 Assembly Elections.