Ayamonte 22 March 2022
Dear Members of the Residents’ Association and the EUC Costa Esuri,
For the first time since its constitution, the Governing Council of the EUC will present a Report on the Annual Accounts, the preparation of which being the responsibility of the Administrator, who does not seem to be prepared for this task and who, in my opinion, had to do it in a hurry. The result is a useless document!
Nevertheless, I appreciate the good intention because it is the first step and little by little they will do better hopefully.
From reading the said Report:
Point 8: Fiscal situation, says : “Being a non-profit entity, it has no obligation.” I cannot work out what the “obligation” might be. Whoever prepared the Report may know something, but they do not explain this.
However, now we have an important piece of information which, until now, I have been told about only by word of mouth and on only one occasion.
The Governing Council, and therefore the City of Ayamonte, considers the EUC as a “non-profit” entity. It is very important to understand the legal nature of “an entity” in order to understand the rules it is subject to within the legal system. This helps us to determine the accounting framework more precisely. At this stage, I will not go into discussing whether it is correctly classified, but I am of the opinion that it is not.
On 26 March 2013, the Accounting and Auditing Institute-ICAC, mandated by the Ministry of Economy, approved the Accounting Plan for Small and Medium-sized Non-Profit Entities, which, until then, had to apply the General Accounting Plan in the terms provided for in Royal Decree 1514/2007 of 16 November 2007, and other lower-ranking provisions.
On examination of the Report, it does not comply with the minimum information requirements of the simplified reporting model contained in the Accounting Plan.
The Report is inseparable from the Balance Sheet and the Profit and Loss Statement. The Report should complete, expand and comment on the information contained in the Balance Sheet and the Proft and Loss Statement at the end of the Accounting Year. In particular, it should contain a detailed description of the degree of compliance of the entity’s activities.
Of the fourteen items that have to be included in the Annual Report, only twelve appear in the index of the Report published, some of which have a description very different from what the Accounting Rules require.
The impression I have is that it has been prepared in haste for submission to the AGM on 30 March 2022 and contains very substantial errors and shortcomings.
It is said in the Report that there was no reason why the Financial Statements for the current year should not be compared with those for the previous year. However, there is no comparison. Only the figures for the year 2021 are shown on the Balance Sheet and the Profit and Loss Statement, so they cannot be compared. To top it all, they say that the Entity does not have Financial Assets, does not have Financial Liabilities and does not have its own funds. Of course, if they do not exist, there is no need to provide explanations.
Gentlemen and lady of the EUC Governing Council, a little rigor and seriousness, please! The same for the Administrator! This is because, before publishing a document, it must be reviewed and corrected, if necessary.
With such an accounting, the right decisions cannot be made. I have, in some previous notes, made some comments about the Balance Sheet, the Profit and Loss Statement, as well as the the Income/Expenditure and Justification of the Balance document, which the Administrator intends to be considered with the other documents as a whole.
My opinion is that the Annual Accounts Report, published on the transparency window of the EUC Costa Esuri website, does not meet the minimum requirements required by legal regulations – in particular, the Accounting Plan for Small and Medium-sized Non-Profit Entities. In addition to the fact that the Balance Sheet and the Income Statement also do not meet the formal and substantive requirements, I believe that they should not be approved and I shall vote against their approval.
If you have reached the end of this report, thank you for your attention and I hope it will help you to have a better understanding of the workings of the EUC.
Below are links to the documents mentioned in the post