Analysis of EUC Accounts FY 2019

FINANCIAL YEAR 2019 / COMMENTS ON THE ACCOUNTS

For the information of all the associates, as well as the members of the Costa Esuri Urban Conservation Entity (all owners).

These are some personal comments on the documents that the Governing Council publishes on the EUC Costa Esuri website as annual accounts for the 2019 financial year, expanding on those I presented in 2020.

As the Ordinary Annual Assembly was not held in the first quarter of 2020 due to the covid-19 pandemic, the accounts are not approved by the Assembly.

My opinion is that the documentation presented does not meet the requirements of accounting law, the documents are not regulated and the principles and criteria taken into account to prepare them are not known. They are insufficient to show a true image of the Entity’s assets and the financial result for the year.

First.

I observe that some of the documents bear the letterhead of Playa Managering SL with NIF B88248117, in 2018 they had the letterhead of M&M JESUS ​​MENENDEZ-MORAN with NIF 51344133Z. In the 2018 accounts it was stated that 3,380.34 euros were owed as of 12/31/2018 to Administración Playa Managering. I believe that all EUC documents should bear your identification, name, address, NIF, telephone number and others that are considered convenient and know with whom the administration and accounting preparation is contracted.

In the Budget for 2019 it is reported that the entity maintains a contract for the provision of administration and management services with the company MR Managering Madrid SL, it is reported that Playa Managering is its commercial name in Ayamonte, but a commercial name does not have a NIF assigned Unless it coincides with a commercial company or owner with the same name. In the 2019 accounting, there is an account in the name of MR Managering Madrid SL. If Playa Managering SL is a commercial company, what is the relationship between the two companies? Why is it not contracted directly with Playa Managering SL? What is the NIF of MR Managering Madrid SL.?

If the Governing Council has contracted with MR Managering Madrid SL the administration and management, why are the accounting documents formulated with the Playa Managering SL letterhead?

It is a formal detail to clarify because there should be no confusion as to who is in charge of providing the service, or is it that MR Managering Madrid SL has subcontracted the provision of the service to Playa Managering SL.?

The Budget does not include any identification of the EUC Costa Esuri in its heading, nor the exercise to which it corresponds.

The document is not signed by any member of the Governing Council.

Second.

Income and Expenses Document

The presentation format is not the one legally established and among other deficiencies I will point out the ones that seem most important to me.

The data for the 2018 financial year are not provided in order to make a comparison between the exercises.

It begins with “initial balance as of 01-01-2019…. Amount €4,568,031.59 ”, I do not know what that balance may represent, no specific account or concept is mentioned. When reporting income and expenses for the year, no reference should be made to any opening balance.

In the income, it is detailed:

Community fees €950,362.28

Interest for late payment €35,099.30

Bank interest €11.67

Interests Executive Rec. €14,231.82

Serious mistakes are made here, the fees are to be collected, they are income accrued, the amounts of interest for late payment and for Executive Rec. I think they are not only interests, but will include the principal of debts from previous years. Thus, we mix income from the year with receipts of income pending from previous years. In this way the income is increased. Yes, the interest collected should be considered income for the year.

By the accrual principle, only income and expenses for the year should be collected and not collections or payments in relation to credits or debts from previous years.

By deduction, to determine the final balance it is added with the income, so it could be the remainder of all the previous years accumulated, but I insist it does not correspond in this document.

The amount that appears of €518,622.85 that corresponds to the payment of the old debt with Confort Servi, should not appear in this report either, because even if it is a payment, it is not an expense for the year, the expense should have been reflected in the year that the service was provided and billed.

The concept of “Fees” does not conform to the rules either, it corresponds to the expenses for services provided by other companies for administration and management.

From the section on Justification of the balance, I would like to point out the following:

In 2018 there was Playa  Management to which €3,380.34 was owed, in 2019 it is no longer reflected, but MR Managering Madrid appears to which € 69.66 is owed.

In 2018 there was Ayamonte Organization (?) With an amount of €1,390,766.31 and in 2019 there is the same amount with the name DEBTORS OF DOUBTFUL COLLECTION. Why the change?

In 2018 there was Organismo Costa Esuri (?) With an amount of €2,484,136.74 and in 2019 there is the same amount, but it is named RECEIPTS PENDING. Why the change?.

In 2018 there was a line called Income Prjectes Iniciatives socials with an amount of €5,264.88 and in 2019 there is the same amount that is now called Items pending application (¿).

The amounts assigned to the titles Owners, obligations / receipts in the amount of

€3,801,449.12 and to the Revenues of the City Council SGTH charge in the amount of -€2,564,572.18 for their amounts need an explanation, which should be found in the Report.

Third.

List of items to be settled classified by groups.

It consists of a detail of the income and expenses classified by concepts, making the same mistake of considering the payment of the old debt of Confort Servi as an expense for the year for a total of €518,622.85.

The amount given for Receipts pending collection for the amount of €5,111,779.99 coincides with the sum of the amounts of the concepts that in the previous Income and Expenses document is broken down as follows:

Owners, obligations / receipts €3,801,449.12

Doubtful debtors €1,390,766.31

Receipts pending collection €2,484,136.74

SGTH City Hall revenue – €2,564,572.18

In neither of the two documents is it detailed or explained what the result of the year has been, if deficit or surplus and its amount.

You make the mistake of including and applying beginning balances or amounts from previous years that in no way should be taken into account when calculating the result for the year.

Fourth.

The document called Budget Settlement Statement is not formulated, which consists of relating the income and expenses made in the year with the budgeted amounts in order to better make future budgets and budget execution.

Fifth.

PYMES Profit and Loss Account Document

This document shows the income and expenses for the year with the same amounts included in the previous documents and the initial balances are suppressed, using the format or model of the General Commercial Accounting Plan and not that of public entities.

You also make the mistake of including the payment of the old debt of Confort Servi in ​​the amount of €518,622.85 in the expenses for the year.

Unlike the other documents analyzed, it reflects a Profit for the year amounting to -€60,599.61, which represents a deficit.

If the expense of €518,622.85 is eliminated, the result would be a surplus of € €458,023.24.

PYMES Balance Sheet Document

The document reflects a result of the year for an amount of €5,016,554.83, no one will miss that it is incorrect and impossible. The result of positive or negative previous years is not detailed.

There is an item of Receipts in collection management for the amount of € 1,310,330.87 that does not appear in the General Ledger accounts.

It is reported in the long-term debt section of a debt for € 9,500.00 that was also in 2018, without clarifying with whom.

It is also reported in the section of short-term debts of an amount of -€5,264.88 that is not a debt in the section of items pending application.

The figure reflected in the Entity’s Own Funds section for an amount of € 5,016,554.83 does not coincide with the figure reflected in the Income / Expenses document as the final balance, which is €5,026,054.83 if it is they want to express the same concept. Which is correct?

Sixth

Book of Balance Sheets and Annual Accounts (Fiscal Year 2019)

The document called Book of Balance Sheets and Annual Accounts, collects the verification balances of quarterly amounts and balances, with the amount of the balances of the detail accounts and their grouping in the higher order accounts to put them in relation to the Balance Sheet. and the PYMES Profit and Loss Account, which I have commented on in points 4 and 5 and which do not require any comment.

Memory

It is not presented, which is an important lack of information, as well as not presenting the Balance and the Account of the economic and equity result without the amounts of the previous year for comparison.

The report completes, expands and comments on the information contained in the other documents that make up the annual accounts. In it, any other information not included in the Instruction model for its formulation that is necessary to allow a better understanding of the situation and the activity of the entity in the year must be indicated, facilitating the understanding of the annual accounts, in order to that they reflect the true image of the patrimony and the economic result of the entity.

Francisco Tapia Catalán

May 2021

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