SNP auditors highlight poor record keeping as party deficit widens to £800,000

The auditing firm appointed by the SNP earlier this year has highlighted poor financial record keeping when signing off its first set of accounts for the party.

Manchester-based AMS Accountants Group, which was appointed by leader Humza Yousaf in May after it was revealed the SNP had been without an auditor for several months, okayed the 2022 accounts in time for them to be filed ahead of the Electoral Commission’s July deadline.

The accounts have been published on the commission's website today and reveal that the party had a deficit of just over £800,000 in the 12 months to December 2022 after membership numbers and subscriptions fell and donation income almost halved.

In its note to the accounts AMS said it signed them off on a qualified basis, meaning that while it was satisfied that everything was in order it had identified an issue that needed to be highlighted.

“During the course of our audit we identified that original documentation in respect to some items of cash and cheques received for the current and prior year, relating to membership, donations and raffle income, were not kept by the party,” it wrote.

“We have been unable to satisfy ourselves by alternative means regarding the completeness of income in respect of the above limitation in scope.

“Consequently we are unable to determine whether any adjustment to income is necessary in the current year or prior year and the potential impact on opening reserves accordingly.”

There has been intense interest in what the SNP’s accounts would show after it was revealed during the race to repalce Nicola Sturgeon as party leader that former auditors Johnston Carmichael stood down at the end of last year.

The firm had been retained by the party since at least 2009 but resigned after Police Scotland was called in to investigate how £600,000 of funds raised to fight an independence referendum had been spent.

In the introduction to the accounts party treasurer Stuart McDonald, who took on the role in April after incumbent Colin Beattie was arrested and released without charge as part of the probe, wrote that “the report cannot and does not comment on any matters subject to ongoing police investigation”.

Noting the drop-off in membership numbers, which fell from 103,884 in 2021 to 82,598 in 2022 and stood at 73,936 in June, McDonald said the accounts “illustrate the huge significance of individual membership income and donations for the party”.

Along with the fall in membership, subscription income fell from £2.5m to £2.3m. Although its expenses for the year were down by £200,000, that pushed the party’s deficit for the year up from just under £730,000 to £803,659.

That means the party has now posted a deficit in six of the last 10 years. The largest was in 2016, when its expenditure outstripped its income by £1.3m, in part due to fighting a Holyrood election campaign.

McDonald noted that the 2022 deficit is “not out of keeping with other years in which nationwide elections were fought” but said that “it will be important to seek to return the party to surplus in 2023 as we build towards the next general election”.

“Events since the start of the pandemic and the ongoing cost-of-living crisis have thrown into stark relief just how critical regular-giving income is for the party, providing an essential core income and giving time and space to review, adjust and react when challenges arise,” he said.

“The party will give renewed focus to this area to ensure regular giving is nurtured and protected.”

Elsewhere, the accounts revealed that the party received donations of just under £370,000 during the year, the second lowest level since 2008 and a drop from £695,000 in 2021.

Its best-ever year for donations was 2014, with £4.5m being pledged in the year of the independence referendum.

The accounts also show that new chief executive Murray Foote, who stood down as the party’s communications chief in a row over the publication of membership figures, will be on a salary of £90,000. This is an increase on the £79,750 paid to interim chief executive Sue Ruddick.

The post has been vacant since Peter Murrell, who is married to Sturgeon, resigned over the same membership-number row.

Murrell, who two years ago loaned the party £107,000 to help with cashflow, is still owed £60,000.