National Audit Office of Finland audited political party funding - most transparency requirements are met

– According to our audits, the funding disclosures are mostly correct and contain the essential information on the contributions received by the audited entities. Even though some disclosers had to provide supplementary information after filing their disclosures everything has gone rather smoothly, explains Director for Financial Audit Jaakko Eskola.

Auditors discovered a number of cases where the recipient had not always filed up-to-date disclosures of the contributions that it had received. As in the previous audits, it turned out that it is impossible to obtain a reliable overall picture of political party funding simply by examining income funding and the proceeds entered in the financial statements.

-There are different types of accounting transactions that are regarded as pass-through items. However, determining their content is relevant from the perspective of the subsidies referred to in the Act on Political Parties, notes Principal Financial Auditor Klaus Krokfors.

According to NAOF, most of the audited entities’ accounts were properly managed and it was possible to monitor compliance with the Act on Political Parties on the basis of the accounting records. However, NAOF would like to emphasise the importance of accurate, itemised and up-to-date accounts and it also urges the disclosers to pay attention to the documentation of loans and agreements, processing of membership fees and the accounting of petty cash. According to the law, the itemisation of election campaign costs and funding should be traceable from the accounts and other documents and should be reconcilable with them.

– There were also inadequacies in the manner in which the audited entities have elected their auditors and in the auditor’s reports. Under the Act on Political Parties, only authorised auditors may be elected as auditors and not all entities had complied with this requirement. There were also auditor’s reports that did not contain the statements required under the Act, Krokfors explains.

According to NAOF, it seems that its audits and monitoring helps making political party funding more transparent. NAOF will continue the audits in the autumn with some 50 political party organisations.

Since 2016, monitoring the use of the state aid granted to political parties (party subsidies) has been the responsibility of the NAOF. When carrying out this task, NAOF has already found that there are inadequacies in the contractual procedures laid down in the Act on Discretionary Government Transfers.

NAOF and the audit of political party funding

The National Audit Office of Finland monitors compliance with the provisions of the Act on Political Parties concerning financial support, disclosure of election campaign costs and funding and the preparation and filing of related documents. All contributions in the form of money, goods, services or other support are regarded as financial support.

There are about 6,000 party associations in Finland. In total of 145 are monitored by NAOF. All monitored associations submitted their 2015 financial statements to the election funding register.

Between 2011 and 2016, NAOF conducted a total of 160 audits of political party funding. During the time about 17.9 million euros in contributions were received and reported by political parties, their district and women’s organisations, entities affiliated with them and party associations. Of this total, about 2.3 million was reported in 2016.

In 2016, NAOF audited all eight political parties represented in the Finnish Parliament, their six women’s organisations and 34 of their district organisations. A total of 48 audits of political party funding were conducted, which was 13 more than in the previous year.

Further information:
– Principal Financial Auditor Klaus Krokfors, tel. +358 9 432 5743,
– Director for Financial Audit Jaakko Eskola, tel. +358 9 432 5713,