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Published Audit Report on Annual Financial Statement of the Social Democratic Party of Montenegro for 2014

Podgorica, 11th September 2015 - The State audit institution has conducted a financial audit of the Annual financial statement and regularity audit of the Social Democratic Party of Montenegro for 2014 with regards to compliance of its operations with legal and other relevant regulations.

Based on the performed audit, established facts and consideration of the audited entity’s Response to the SAI’s Preliminary Report, the Auditing Board, composed of Mr. Nikola Kovačević, Head of the Auditing Board – member of Senate and Mr. Branislav Radulović, PhD, member of the Auditing Board ‐ member of the Senate, has given unqualified audit opinion with an emphasis of matter on Annual financial statement and unqualified opinion on regularity audit.

The financial audit has established that Annual Financial Statement of the Social Democratic Party of Montenegro for 2014 is in all material aspects prepared and presented on a fair and objective manner in line with accepted financial reporting framework. Notwithstanding its unqualified audit opinion, the Auditing Board draws attention of the auditee on the following: procurement of all new assets should be recorded on appropriate account within Class 0 – fixed assets so to ensure data on total fixed assets and financial transactions related to regular operation and election campaign should be divided in its business books so to ensure precise data.

The regularity audit has established that the financial and other activities of the audited entity are, in all material aspects complied with legal and other regulations identified as criteria for a given audit, except in a part of the Audit Report, under item 11 of Section named Business books, item 12.1.6. of Section Cash holding and item 12.12. of Section Income Statement.

In the audit of Annual Financial Statement of the Social Democratic Party of Montenegro for 2013, the SAI established a certain number of irregularities and gave four recommendations to the audited entity. In the audit of Annual Financial Statement for 2014, the SAI has established that the audited entity implemented the audit recommendations which refer to the following: keeping record of receivables from local self-government and reducing of cash payments from the treasury. The cash payments are reduced by 32% compared to the previous year.

The audited entity did not implement recommendations which refer to the following: stating total realized revenues in the Income Statement (realized revenues in amount of 126.427,55€ are not stated in the Income Statement, but the surplus of revenues to the expenditures executed is recorded in the Balance Sheet, as Other capital), harmonization of the Decree on remuneration of travel costs and per diems of the members of party bodies with applicable Statute and documenting transport service expenses (The Decree on remuneration of travel costs and per diems is not complied with the applicable Statute, and the transport service expenses are not additionally documented with fuel receipts, bus tickets etc.).

The final Audit Report on Annual Financial Statement of the Social Democratic Party of Montenegro for 2014 has been officially published at the web site of the State audit institution.

Excerpt from the Audit Report on Annual Financial Statement of the Social Democratic Party of Montenegro for 2014

Audit Report on Annual Financial Statement of the Social Democratic Party of Montenegro for 2014 (mne)