Report on the monitoring of the funding of political parties in 2018

Most parties comply with the regulations on funding in the Act on Political Parties, but there is room for improvement in the case of some procedures. The National Audit Office annually audits political party funding, reviewing financial statements and accounting of the audited entities from a period of several years. The purpose is to verify that the statutory funding disclosures are submitted correctly, comprehensively and at the right time to the public electronic party funding register maintained by the NAOF. The NAOF also audits the state subsidies of political parties represented in Parliament (also called party subsidies).

Main content

The Act on Political Parties contains mandatory provisions aimed at promoting the transparency of funding for political parties and party associations.

The aim of the provisions is to increase the transparency of party funding, particularly taking into consideration the recommendations made to Finland by the Council of Europe’s Group of States against Corruption (GRECO). According to the recommendations, the general public should have adequate information on the funding of parties’ basic activities and election campaigns so that any interests can be evaluated.

The National Audit Office monitors compliance with the provisions set out in the Act on Political Parties concerning financial support, the disclosure of election campaign costs and funding, and the preparation and submission of related documents by monitored entities. From the beginning of 2016, the National Audit Office has also been responsible for supervising the party subsidies referred to in the Act on Political Parties.

Financial statements for 2017 of political parties, associations referred to in a party subsidy decision, and entities affiliated with a party have been sent to the electronic party funding register.

Contributions totalling almost EUR 24.9 million received by parties, party associations and affiliated entities were reported to the party funding register in up-to-date disclosures between 2011 and 2018.

Contributions totalling almost EUR 2.8 million were reported in 2018. The up-to-date disclosures also applied to previous years in such a manner that additions made in 2018 totalled some EUR 0.5 million (for 2017) and some EUR 0.2 million (for 2015). A large part of the information supplementing the disclosures is the result of audits of political party funding.

A total of 31 audits were conducted on the monitored political parties as well as their district organisations and affiliated entities in 2018. On the basis of the audits, the up-to-date disclosures concerning political party funding and their supplements are correct in all essential respects and provide correct information on the financial support received by the audited entities in essential respects.

The auditors discovered a number of cases where the recipient had not always filed up-to-date disclosures of the contributions it had received. As in the previous audits, it was found out that it is not possible to obtain a reliable overall picture of party funding simply by examining income funding and the proceeds entered into the financial statements. The audited political parties and other entities have many kinds of accounting transactions that are regarded as pass-through items. Nevertheless, determining their content has significance from the perspective of financial support as referred to in the Act on Political Parties.

The National Audit Office has recommended that the up-to-date disclosure referred to in the Act on Political Parties be also submitted of candidate’s contributions and MP’s contributions. However, not all the monitored entities have complied with this recommendation. Thus, the related contributions are not entered as subsidy in the party funding register.

As a rule, the monitored entities’ accounting has been managed properly so that monitoring compliance with the provisions in the Act on Political Parties has been possible on the basis of the accounts.

As in previous years, there were again inadequacies in the manner in which the monitored entities had prepared their auditor’s reports. The auditors have at times failed to include the statements required under section 9 c of the Act on Political Parties in their reports. In recent years, there has been improvement in the reporting by auditors, but the statements issued in the auditor’s reports have not always been sufficient or unambiguous.

In the audits of party subsidies, the cost accounting procedures of a total of approximately 150 recipients with the obligation to keep accounts were examined. Where necessary, the recipients were requested to correct their accounts or to submit additional information about their procedures. The audit memorandums issued of the completed audits of political party funding contain findings regarding the state subsidy procedures applied. The memorandums also draw attention to the allocation of party subsidies to entities other than the associations referred to in the Act on Political Parties.


URN identification

URN:NBN: VTV-R82019vp