The SNP’s auditors have flagged a “heightened risk of fraud” in two key areas in their report on the party’s latest accounts, which were published today.
Auditors state that they met the party’s management to “understand where it was considered there was a susceptibility to fraud” and state in the report: “As a result of performing these procedures we have assessed the following areas as a heightened risk of fraud; related party transactions and manual journal entries.”
The publication of the accounts came after former chief executive Peter Murrell pled guilty to embezzling more than £400,000 from the SNP on May 25 and was sentenced to more than five years in prison. The party states in the accounts that it “will be seeking to recover from the guilty party the full amount embezzled". But it adds: “The accounts do not include any assumption of a successful outcome”.
The auditors state in their report: “We assessed the susceptibility of the party's financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud.
“This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls.
“In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. As a result of performing these procedures we have assessed the following areas as a heightened risk of fraud; related party transactions and manual journal entries.”
The auditors noted that they have performed a number of procedures “to provide reasonable assurance that the financial statements were free of material fraud or error”.
These include: “Enquiring of management and reviewing NEC minutes for any references to breaches in laws or regulations or indications of any potential litigation or claims.
“Performing audit work procedures over the risk of management override of controls, [including] testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of related party transactions outside the normal course of business and reviewing judgments made by management in their calculation of accounting estimates for potential management bias.”
However, the auditors highlight that there are “inherent limitations in the audit procedures performed”.
“Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation.
“There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.”
The SNP accounts show the party recorded a surplus of £510,703 during the year to December 31, 2025, following a deficit of £384,060 the year prior.
“While this is partly explained by the fact that there were no scheduled elections in 2025, it still represents a significant improvement in the party finances,” the accounts state. “This was only possible thanks to some very difficult cost cutting decisions in 2024.”
Total income fell to £3.775 million from £4.506m as donations more than halved to £442,577 from £937,167. However, staff costs were cut to £978,538 from £1.466m.