Creative accounting

When I was in charge of finance at Anfield, it was common practice to move money from one area of the budget to another during the course of the year. We did so with the permission of the school’s governing body. I dare say local councils in Spain do much the same thing. If you have over allocated in one area and under allocated in another, it makes a lot of sense to move the money around.

However, when the Spanish government allocated money to local councils under Plan E, it was for a specific purpose. Plans for the use of that money had to be submitted and approved before it was released. Once the work was completed and signed off, the government released the money to pay the bills.

One of the plans for Bigastro was the remodelling of Avenue Apatel for which a budget was set at 355,787.67 euros of which the government would fund 249,051.37 euros.

As the work was completed, the certificates were signed off and payment should have then been made within 30 days. Although the work was finally completed on the 22nd December 2010, Pastor Medina had only been paid instalments in spite of the fact that the government sent 100% of the funding to the council.

The ex mayor, Raúl Valerio Medina along with two technicians and the treasurer have had to testify in court to say exactly where the money went and why the contractor was not paid. At the time, the council was struggling to meet its debts and so it is likely that the money was used to prop up some other part of the budget. Unfortunately, the strict guidelines for Plan E money did not allow for that sort of accounting procedure.