The Professional Football League (LFP) detects irregularities in Elche's accounting

The Professional Football League (LFP) detected irregularities and raised doubts about the veracity of Elche's accounting after the complementary audit carried out by BDO Auditors in the past month of November, which has been accessed by EFE.

In the introduction to the report, the LFP reminds that before the promotion in 2013, the club was in a "delicate financial situation" that the League expected to rebalance after promotion to the top division, based on the budgets submitted by the entity.

The auditors found numerous irregularities in the financial management of the board of directors presided over by José Sepulcre, which led to the opening of several proceedings against the club and its directors, resulting in the administrative relegation of the Elche entity months later.

The economists acknowledge in their report the "cordial" treatment received from the management and members of the club, but point out that "their late and contradictory responses do not offer us guarantees regarding the analysed Treasury."

According to the report, Elche had an "off-book expense management, consisting of the omission of their accounting for an amount of €1,530,670". The report states, "We have doubts about the reliability of the accounting statements that the club has not provided once these expenses have been regularized."

This off-book management was revealed by the club's management after its fiscal regularization, one month after the visit of the LFP auditors.

The way to regularize the items, according to the aforementioned report, was to "remove from the accounting the first three entries that indicated the hypothetical cash transfers to the Foundation and account for the expenses associated with the existing payments."

The report adds to the list of irregularities cash payments that had not been recorded in the club's accounting and that corresponded mainly to personnel expenses, employees, and external collaborators.

It also points to the existence of "destroyed documentation before it could be verified" related to player bonuses, as recognized by the auditors themselves to Antonio Rocamora, the Elche's general secretary at that time.

Among these payments, an example is given of a payment to former Elche player José Luis Acciari for a "supposed debt" with the player a year and a half after his departure from the club, although it emphasizes that there is no documentary evidence of that debt beyond the receipts that the club possesses, which do not prove "either the reality of the debt or its amount".

The auditors add that "we cannot conclude on the reliability of the balances corresponding to the Treasury area" because the information provided by the club, generally requested by the firm after detected incidents, "has been contradictory and in some cases would not correspond to reality".

It is also highlighted that a cash audit conducted on June 30, 2014, "did not correspond to the actual cash balance as it included as cash a portion of the ticket sales made in the month of May that were collected through bank accounts," so the auditors speak of a "lack of credibility."

Another aspect that is emphasized is that Elche handled a large amount of cash in the summer months, derived from sales of season tickets and ticket revenues, of which only less than half was deposited into the club's bank account.

Possible links between the board and shareholders of the club with Elche's list of suppliers are also studied.

Thus, the report reveals that Kuntajara, a company owned by former board member Juan Carlos Ramírez and "with business connections with the board member and general manager, Antonio Rocamora," received "a participatory loan of €2,900,000, with a payment of €200,000 being verified through a promissory note that has not caused any variation in the accounts payable to this entity."

The auditors summarize that some of those who were board members of the entity appear as debtors and creditors, although the debt with Elche would amount to €284,511, while the club's debt with board members and shareholders would amount to €5,113,263.

The auditors' conclusion is that they consider that Elche's "actual cash movements would not be reflected."

"Due to the different contradictory versions and explanations that have been provided to us during our work, we are not in a position to conclude on the accuracy and reality of the club's Treasury position as of June 30, 2014," they conclude.