THE FUND - CURIOUSER AND CURIOUSER

EUMENIDES IS PLEASED TO PUBLISH  THIS POST BY OUR GUEST ALECTO!

No Stone Unturned Limited - Audited Accounts - 2007 to 2014

Back in 2007 it would have been difficult to imagine that 9 years after its creation the Fund would have been such an enormous success and yet remain such an enigma. There's been much speculation into its many aspects in particular the nature of its incomings and outgoings. Below is one forensic opinion based on the information we've been given. 

As detailed accounts were only available for years 2008, 2013 and 2014 (highlighted in pink in the expenditure tables) it's not possible to tell for certain what income/expenditure fell under the various categories from 2009 to 2012 (highlighted in Blue).  There was some information available from the published accounts which helped and it was also possible to estimate some of the expenditure based on the actual trends.

The values highlighted in blue are one interpretation based on the criteria detailed in each section.  There's insufficient data to analyze 2015 accounts, all we can tell is that the expenditure exceeded the income by approximately £7K.  

FUND INCOME

 

We can deduce possible ratios from 2008, 2013/14 and take information into account - for example we're told that Libel Income of £550K was received in March 2008 from the express, £275K from the Tapas 7 and £125K from News of the World in 2009 accounts. We will assume that the libel donations were lodged net of taxation and legal costs therefore I have deducted 50% of the sum awarded.   Below is an example of how the income breakdown might look. 

We can see as we'd expect - most of the Bank, Internet Donations and T-Shirt sale donations were received in the first year and probably in the first 3 months of Madeleine's disappearance. Roughly 58% of income came from donations via Bank and Internet, the remainder generated from Kate McCann's book, libel payments and T-Shirt Sales. Bank donations dropped from £85,874 to £18,520 between 2013 and 2014.  It's clear that the public's donations have largely been spent and the Fund is operating on the money Kate invested from book sales. Is it fair to assume that the Fund Directors now see No Stone Unturned Limited as Team McCann's private entity?

 * Pink values actual, blue values estimated

This income is relatively straightforward - cash is received through the bank from various sources and reflected as income. Given its simplicity the minus income of £15,796 is a puzzle, how can donors charge the Fund or unpay an internet donation? You can only assume that 2012 Internet donation income was incorrectly overstated - but how could this happen and how did the accounts pass audit? Whatever the situation minus bank receipts are seen as a red flag in any organization.

Similarly it seems odd that T-Shirt sales dropped to £172 in 2013. While the 2012 income of £4,716 is an estimate the 2014 income of £2,744 is actual. It seems  strange that people would buy more T-Shirts in 2014 than the preceding year as it doesn't reflect the overall trend of the Fund.

In 2013 the findmadeleine website migrated from infohost to Domains by Proxy which seemed to result in a change in technology, I recall that shop/donation options were disabled for over a month. As you'd expect this caused a drop in internet donations which ceased completely in 2014. We can deduce that cumulatively internet donations were understated in the accounts to 2012 by at least 16K but this figure could be a lot more like 25K as we don't know how much was received in 2013, only that it netted to a difference in the year of minus £15,796. 

ADMIN COSTS

 

* Pink values actual, blue values estimated

In any company it's understood that admin costs - while necessary - are seen as costs that don't add value to the business. Given that the company doesn't need premises or staff you'd expect Admin costs to be minimal yet they run at 7% of overall income so in real terms £300K has been spent on nothing more than administering the Fund of which £250K approximately was spent on professional services: Legal Fees, Admin, Audit, Accountancy and Professional Fees. 

Much has already been spoken about regarding the £69K legal cost which was paid out in the first year. I've assumed this was a one off charge as the trends indicate it didn't recur. As the cost appears under the Admin category it implies that this was the legal cost of setting the Fund up which is difficult to understand. 

Notes to the accounts state that the Fund provided an Admistrative resource to Madeleine's family from 2009. I've added this line into the accounts (highlighted in green) though the actual figures for 2013/4 suggest this administrative support  was probably charged to the Auditor line as Audit fees were approx £2K more than reflected in the published accounts. 

Working backwards from the actual auditors remuneration from the accounts filed it suggests that the administration support for the family was in the region of £31K. It's difficult to understand the nature of this administrative support. 

Given that No Stone Unturned Ltd is a pretty basic company with few transactions/dynamics  the Audit cost  seems unreasonably high. It's worth noting that HaysMacIntyre had no comment regarding the discrepancy in Internet Donations in 2013. 

As we've already covered the main Professional fee categories of Legal, Audit & Accountancy and part time Admin and 6 directors with varying skill-sets it's very difficult to understand what the remaining £87K of Fund Professional Fees might cover.

Brian Kennedy - Who paid for the Investigators?

 

In September 2007 just a few days after the McCanns arrived home to UK according to reports Brian Kennedy approached them and offered them financial assistance. The nature of this financial assistance is vague  but it's broadly hinted Brian would pay for their legal costs associated with lifting their arguido status and PR difficulties associated with it - ie. Edward Smethurst's legal and Clarence Mitchell's PR services. 

We're told by Kate and Brian Kennedy that they had no previous connection with each other. I don't see any similar statement between the McCanns and Edward Smethurst though reportedly both Gerry and Edward Smethurst had a shared interest in the Nuclear Energy Industry. Given that Edward Smethurst is still a Fund director we could be forgiven for asking if it was he who approached Brian Kennedy and not the other way around.

From October 2007 there were various media reports on the hiring of the private investigation company Metodo 3 and claims as to who liaised with them and who paid them. According to Clarence Mitchell and the Fund Directors and audited reports it was the Fund who paid for Metodo 3. In January 2008 he makes an interesting statement - "We are paying Metodo 3 £50,000 a month so of course it is a subject of debate. The decision is as much with Brian as it is with the fund, which pays for Metodo 3's involvement." 

Reports throughout 2008 and early 2009 continued to emerge regarding Brian Kennedy's underwriting of the Fund's main investigators - Metodo 3, Oakley and Alphaig Ltd. In January 2008 Edward Smethurst became a Director of the Fund thereafter it's not clear whether Edward Smethurst's involvement with the investigators was on Brian Kennedy's or the Fund's behalf.  By early 2009 Brian Kennedy was heavily criticized for his handling of all investigations. 

We must assume that the Fund paid for the investigations because that's what the audited accounts tell us. In the accounting world it's not possible to play the "victim" card and blame Brian Kennedy for mishandling the investigations as it was the Directors who made the agreement and who paid the money over - therefore their mismanagement . 

The question is what really led to Brian Kennedy's termination of support as reported in Feb/March 2009 and why, after supporting their cause financially from September 2007 to February 2009 wasn't he mentioned in the acknowledgement section of Kate McCann's book Madeleine? 

CAMPAIGN COSTS

 

Because each year appears to have a different dynamic it's perhaps easier to analyze these costs by year. Highlighted in green are the items which are more difficult to forecast, they become the "balancing figure" - as we know the Campaign cost totals. 

 * Pink values actual, blue values estimated

2008 - £673K: From the published accounts awareness is explained as distributing flyers and posters across the Iberian Peninsula. Campaign management includes Justine McGuinness, possibly Control Risks and any other expenses not paid by the home office. It's difficult to understand what constitutes £112K Legal fees as we've already had £69K in admin costs for 2008 though the Fund states it didn't pay for Kate and Gerry's legal defence. Much has already been spoken of the £38K web costs. The £250K search fees is explained in the hiring of Metodo 3 - ie. £50K per month as stated  with a balance of £50K likely due in April. The £673K total doesn't include Clarence Mitchell's or Edward Smethurst's fees which were paid by Brian Kennedy. 

2009 - £975K: Estimated.  Awareness is reduced as the Fund states that the website was the key part. The main activities were searches and  translation of the files. £650K to Search Fees seems reasonable - £50K for Metodo 3, £500K for Oakley and £100K for Alphaig Ltd and £180K for translation of the files. Legal fees of £50 included obtaining an injunction against Goncalo Amaral and various libel actions against the Portuguese newspapers and Tony Bennett. Brian Kennedy continued to pay Clarence Mitchell's fees. It's unknown if he continued to pay Edward Smethurst's fees however likely he funded any legal fees in relation to Madeleine being made a ward of court, the release of the files and the lifting of arguido status. 

2010 - £421K: The estimated £113K for Campaign Management is because while Brian Kennedy was no longer paying for Clarence Mitchell and he reduced his work on behalf of the Fund to part time the Fund mentions that they used a specialist communications agency in Portugal to ensure that their "message is communicated as widely and accurately as possible" The £220K for Search fees may be overestimated. 

2011 - £487K: Estimated. With Clarence Mitchell still part time and the Fund still paying the Portuguese communications agency £100K is an estimate for Campaign management. As Operation Grange was established we can only assume that the Fund didn't pay for a continued investigation - rather the cost was for their investigator's assistance with Operation Grange - therefore 60K seems reasonable, one person to answer questions and provide any information requested. Additionally - given the expertise that Grange brought to the table why would a separate Fund investigation be necessary and would Operation Grange even allow it?

It's not possible to allocate the remaining expenditure therefore £268K is  reflected as unexplained Expenditure which makes up 55% of the overall Campaign costs for that year. The Directors report didn't mention legal action so we can only assume the bulk went on the only other item listed in the reports- the specialist Portuguese communications company. The question is - why in its 4th year and when they were appearing constantly in the press - would the Fund need to pay £368K for Campaign management mainly in Portugal? If it's connected to Kate's suspicion that Madeleine is still in Portugal why did they wait 5 years to reveal this possibility in the media? Could the additional spend be connected with the action against Goncalo Amaral? 

2012 - £477K: Estimated. Campaign costs in 2012 were on a similar trend to 2011. Given the actual detail disclosed for 2013 it's easier to line the expenditure up. This year the legal action against Goncalo Amaral has been mentioned by the Directors therefore it seems reasonable to increase travel/hotel and legal costs though we emerge with the same problem as in 2011 - unexplained costs of £256K. 

2013 & 2014 - £179K: The Fund accounts show similar activities to 2012 except it's visible that activities are winding down significantly. It's still surprising how much was paid in 2014 for Search Fees and Campaign Management. 

As stated previously this is one opinion only on the likely nature of the Fund transactions since it's commencement. It's unclear why detail was only disclosed for 2009 and 2013 to 2014. This opinion concludes that approximately 30% of the Fund may have been spent on the search for Madeleine - most of which went to the unsuccessful investigations reportedly managed by Brian Kennedy who wasn't at any point a Director of the Fund. 

With the added complication of Brian Kennedy's assistance and the myriad of different accounts of who paid for what it's difficult to untangle the truth. Logic tells us that as the investigators, Clarence and the media tell us that Brian Kennedy dealt with all investigations he must have paid the bills - but the published accounts say otherwise. 

I gave her one, they gave him two,

You gave us three or more; 

 They all returned from him to you, 

Though they were mine before...