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Fiscal years 2015 to 2019
Organisation in receipt of donations
January 2022
Executive summary
Following the audit of the use-of-funds statement for funds collected from the public by
the Fondation Assistance aux Animaux during fiscal years 2011 to 2014, the Court of Accounts
had certified, in July 2016, pursuant to the provisions of Article L. 143-2 of the French Code of
Financial Jurisdictions, that the expenses incurred did not comply with the objectives pursued
by the appeal for public generosity for the following reasons:
- the foundation had not brought to the donors
attention its strategy to, in the words of its
leaders, ultimately turn it into a structure able to live solely off the income of its assets. This
strategy had led it, over the audited period, to devote almost a quarter of the funds derived
from public generosity to the acquisition of investment properties and the accumulation of
financial reserves, whereas the objectives set out in the donation and bequest fundraising
campaigns only highlighted the need to meet the immediate needs for helping animals;
- the shortcomings observed in the construction of the use-of-funds statement and the drafting
of its appendix did not allow donors to be properly informed of how funds raised through public
appeals for generosity were actually used.
The Court further specifi
ed that the audit had “revealed multiple shortcomings in the
governance, organisation and management of the foundation” and seven recommendations
had been made to it.
The French Budget Minister decided not to suspend the tax benefits related to donations,
bequests and payments made to the foundation and specified, in the report giving reasons for
his decision to the First President of the Court of Accounts, that keeping these benefits was
subject to the recommendations issued by the Court being immediately
addressed, the “rapid
and rigorous” change of the challenged practices and changes to governance.
Following this audit covering fiscal years 2015 to 2019, it appears that little significant
progress has been made since 2016, despite the French Budget Minister
s express requests
and the commitments made by the foundation. Although the foundation has made a few
technical corrections, none of the shortcomings noted by the Court on key issues in the life of
the foundation has resulted in substantive reforms so far.
Foundation accounts and financial communication: still
insufficient progress
The rules for drawing up the foundation
s financial statements (balance sheet and profit
and loss accounts; use-of-funds statements) had been the subject of numerous criticisms from
the Court. The foundation endeavoured to respond to them, by making the required changes
to a large number of technical points. Some key recommendations nevertheless remained
unimplemented between 2015 and 2019, even though they related to positions of principle
constantly reaffirmed in the past by the Court and now imposed by Accounting Regulation No.
2018-06 of December 5, 2018 applicable since fiscal year 2020: recording proceeds from
bequests in operating revenue in the profit and loss account; including financial or real estate
income derived from funds raised through public generosity in the “funds collected from the
public” section of the annual use
-of-funds statements.
In terms of financial communication with the public and donors, undeniable progress has
been made, both through the improved information provided in the annual financial reports and
thanks to them now being disseminated on the foundation
s website. However, in terms of
substance, the shortcomings highlighted by the Court in 2016 remain valid in all respects. The
messages conveyed on the relative weighting of uses related to social missions, fundraising
costs and operating costs are based on presentation ratios calculated from partial and
erroneous data, which has the effect of overestimating the proportion of uses devoted to social
missions. Furthermore, the foundation
s strong focus on the acquisition of rental properties,
using funds raised through public generosity, is not publicly disclosed in a sufficiently thorough
and transparent manner. Finally, the policy of investing in real estate for operation has
benefited Corsica in particular, although the foundation did not provide the donors with any
communication regarding this choice of priority allocation.
Rules and practices of governance within the foundation: an
unjustifiable status quo
The French Budget Minister had strenuously pointed out to the foundation the need for
it to makes changes to its governance and to immediately change the practices challenged by
the Court in its previous public report. However, no major initiatives were taken in this regard.
A reflection on an overhaul of the Articles of Association was certainly initiated, albeit
very late, at the end of 2018. However, it only resulted in short discussions within the Board of
Directors and did not lead to any decisions, through lack of a clear will to bring this essential
project to fruition. Furthermore, while provisions have been made to resolve certain conflict of
interest situations and establish prevention mechanisms, this process remains perfunctory and
needs to be substantially strengthened.
The shortcomings which deeply concerned the Court in 2016 remain valid. In the
absence of any statutory reform, the unchanged governance practices continue to be marked
both by the lack of collegiality in the decisions taken, the lack of any reliance on specialised
committees created by the Board of Directors and incorporating external experts chosen for
their skills, or even by the obvious lack of openness in the composition of the panel of qualified
individuals. These often long-standing individuals are continuously renewed without any
serious attempt to diversify profiles.
The lack of collegiality and transparency in the decision-making mechanisms, regrettable
in its very principle, also opens the way to management practices that are often based on long-
established relationships with certain service providers or suppliers, which leave little room for
competitive bidding. Such working habits, incompatible with the search for the greatest
efficiency, are detrimental to the foundation
s financial interests and to the best use of funds
derived from public generosity.
Strategy and organisation: a lack of professionalism that
compromises the foundation
s capacity for action
Now equipped with a strategic plan adopted in 2018 in response to the recommendations
made by the Court, the foundation had decided, among other objectives, to continue to develop
its network of regional establishments and to gradually reduce the level of its reserves, deemed
excessive by the court.
Five years later, the results achieved can be considered unconvincing. In the end, the
network of establishments underwent more modest development than expected, due to some
closures of existing retirement homes or shelters and to significant delays in the opening of
new clinics, owing to a lack of effective management by the Head Office. As for the efforts to
modernise existing facilities, which are essential because some of them are in such a bad state
of repair, they too have been very modest.
In light of this picture, which is mixed to say the least, the foundation has only slightly
tapped into its abundant reserves, which are still well above the three-year target level of
operating expenses set out in its strategic plan.
Failing in the implementation of the network development, the foundation also lacks
rigour and professionalism in its operational management and in the management of activities,
even though it is supported by numerous external service providers upon which it has even at
times become dependent. The establishments are insufficiently coordinated, while the
monitoring and assessment carried out by the management are superficial, or even non-
existent. The relationship with the regional State services, the quality and regularity of which
are essential, is poor at times. Finally, human resources management, crucial in a foundation
employing so many employees, is handled chaotically by the Head Office.
This overall observation is all the more worrying since the costs of establishments with
comparable activities (shelters, retirement homes, clinics) vary greatly, without any explanation
being found for these differences: the allocation of funds derived from public generosity is
therefore far from optimal.
Summary of recommendations
Immediately carry out the overhaul of the Articles of Association announced several years
ago, by adopting the standard articles of association recommended by the Council of State
and by choosing the appointment by the State of a government commissioner.
Immediately create specialised committees, as the foundation has undertaken to do, by
including external individuals.
Rapidly strengthen risk management and internal control tools.
Immediately develop full and transparent financial communication, in particular through
ratios of use of funds raised from public generosity established on a basis that matches
Strengthen the prerogatives of the Board of Directors regarding the monitoring of bequest
and donation cases.
Conduct an in-depth reform of the rules and practices for managing the network of
establishments, by setting up tools for planning, management, monitoring activities and
costs, competitive bidding and management control.