INTERNAL AUDIT RECOMMENDATIONS

5th Congress of the European Left Party

Brussels, 11.11.2016
Report of the members of the Internal Audit Group on the undertaken
audit of the Party of the European Left (EL) regarding the years 20132016

The Internal Financial Audit Committee that was elected at the 4th
Congress of the European Left Party, in December 2013, fulfilled its
obligation by controlling the financial data for the period from 1.1.2013
until the first half of 2016 after three consecutive meetings on the
21.10.2016, 10.11.2016 and 11.11.2016.
On the scope of the audit alone, during the 3rd Congress, the auditors
had reiterated that a financial audit has to be necessarily carried out
once per year and that ensures that the group renews its request to the
management board.
The establishment of a more scrupulous and effective control ensures
the sound and prudent management of ELs finances. At such hard times
when the peoples of Europe are suffering from the austerity policies, the
Left should constantly promote its vision for more democracy, justice
and transparency.
The final meeting took place at the EL offices in Brussels on 11
November, 2016 and all four members of the committee were present,
that is comrade Lola Sanchez Tudela (IU), comrade Anna
Kioutsokiozoglou-Poulaki (Syriza), comrade Paul Thevenin (Dei Lenk
Luxembourg) andcomrade Uwe Hobler (DIE LINKE).
The internal audit group was presented with the full documentation
(namely the audit reports, information on income and expenditure given
by auditors, the invoices and receipts in detail) which were tidily filed in
chronological order.
The representative of the EL-Treasurer, Daniel Sheffer, provided gladly
all information on all questions and clarified all relevant enquiries. The
audit was carried out in a professional and comradely atmosphere.

On behalf of the Committee, I will present the results and conclusions of

this audit and make some recommendations.
Regarding the particular assessments:
We have noticed that the decision regarding limits on flight costs on
inner-European flights was not implemented consistently.
In cases where it is proven difficult to adhere to this rule, it shall be
mandatory in the future that the person who travels shall contact the ELOffice and seek support before booking. If this is not done and an overly
expensive (over 500-limit) flight is booked without prior consultation
it is to be examined whether the additional cost shall be attributed to
the travelling person themselves or their party.
The inclusion of travel agencies by the EL-Office in Brussels is to be
further developed.
Regarding the evaluation of the carried out events and meetings like the
congress, the summer university and so on in 2013, we had to take note
that there were big discrepancies between the planning and budgeting
on one hand and the actual expenditure on the other, which highly
burdened the budget. This was taken as reason by the financial
administration to determine that the financial controlling has to be
improved.
From our point of view the following steps should be taken:
The event services actually provided, like hotel, catering, logistics, etc.
shall be confirmed on the spot directly after the end of the event in
question by an authorized representative of the EL-Office through a
signature in order to prevent belated budget increases. This
confirmation will then become part of the financial reporting.
Furthermore, we take note that there has been one case where 20,000
were transferred as a lump sum to an organizer whereas the proper
bill/invoice settlement of the expenses never occurred, although the ELTreasurer explicitly asked for it.
We recommend therefore generally abstaining from lump sum
payments and, moreover, whenever financial support to events of third
parties is concerned, the financing of concrete services shall be agreed
upon and only corresponding invoices shall be paid.

Tenders for services like catering etc., for big events, shall be of higher
importance in order to enable the lowering of the costs.
In the years 2013 and 2014 there has been a difference in the paid
membership fees between the audit reports of Ernst & Young and the
internal EL-documentation. In the accounting and the internal payment
transaction system of the EL there shall be a clear difference between
the payment of membership fees and the compensation of costs, for
instance, participation fees. This is achieved through the concrete
mention of the reason for payment in the bank transfer subject.
In the auditing of the invoicing of the proprietor we have noted an
invoice for charges of 3,000.00 on property tax (called
PrecompteImmobilier in Belgium).
In our opinion, this is not correct according to Belgian tax law and we are
asking for a judicial assessment of this process.
Finally, we are recommending adhering to the following organisational
advice:
1. Basically, the following should continue to apply: reimbursement
of costs should only occur against the submission of original
receipts/invoices, especially regarding meal receipts, procurement
receipts, taxi invoices.
2. Payment orders from the signatories of reimbursement claims to
oneself have to be refrained from. In these cases another bureau
member has to countersign.
3. Regarding payment of invoices for services such as printing of
materials, an original exemplary has to be stored.
4. When reimbursing meal or catering invoices the corresponding
event has to always be mentioned.
5. When reimbursing phone expenses to staff or members of the
board, the storage of the direct and detailed cost overview of the
calls is not asked, out of data protection reasons.
6. Invoices or receipts made of thermal copy paper have to be
copied in order to be able to keep its readability.
With all this advice we are recommending to the congress to discharge
the Executive Board of the Party of the European Left for its work for the
years 2013, 2014, 2015 and the first half of 2016.

We have made every effort to carry off the task you assigned to us in the
ELs previous congress.
You honored us with your trust and this inspired us to work responsibly,
consistently, and in the spirit of comradeship, so we would like to
sincerely thank the treasurer and its staff for the work they carried out
and we look forward to our future cooperation.
Thank you for a kind attention.
Lola Sanchez Tudela
Uwe Hobler

Paul Thevenin Anna Kioutsokiozoglou-Poulaki