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The Court of Auditors considers that the establishment of Snowlab SLU, a company of a commercial nature, by the private foundation of Andorra Research and Innovation, a public sector foundation, “would violate” the law that created the foundation itself. As emphasized in the report of the Court of Auditors on the corresponding entity at the end of the 2022 fiscal year, on the one hand, the Law on Foundations “does not provide that it can carry out its activities through the statutes of a commercial company or through the organization of other entities dependent on them”, and although the aforementioned law allows foundations to participate in commercial companies, it is necessary that the objectives of these companies pursue “similar, compatible and complementary objectives” with them. “The social objectives promoted are largely not given as assumptions”, the Court of Auditors stated.
Andorra Recerca i Innovación argues that the law that created the foundation provides that “it can participate in other public and private entities of any legal nature, whether national, foreign or international, even if they are commercial companies” and that its articles of association have “legal status” that provide for the formation of other entities if their objectives are similar or complementary. Likewise, he explains that one of the milestones of the foundation is “contributing to the diversification of the Andorran economy and the development of a knowledge economy by exploring and exploiting new business opportunities in the fields of innovation and technology” and that Snowlab is also in this regard because in the execution of its objectives “it is developing and exploiting new business opportunities in the fields of innovation and technology while contributing to the diversification of the Andorran economy”. In its allegations, the foundation concludes that “there is no doubt that the Snowlab SLU commercial company was established to achieve objectives or goals similar to those specified by ARI”, which complements the company’s articles of association authorized by a notary. Snowlab is divided into two lines, focusing on improving the efficiency of snow management and planning in ski resorts.
This is one of the irregularities found by the Audit Court, which clearly stated that the company was not audited because it was founded on July 20, 2022, is 100% owned by the ARI Foundation, has a share capital of 40,000 euros, and has a financial year from June 1 to May 31 of each year, so there was no accounting settlement for the company at the end of 2022 (December 31).
Weak control
The Court of Auditors also highlighted the “weakness of internal controls” in a bank account held in the name of the Actuatech Foundation, which was eventually merged into ARI without the new foundation carrying out the relevant management. The account was finally closed at the end of January 2023, with an “erroneous balance” of 3,360 euros, because no transactions were made throughout the year, totaling 1,465 euros, making the result of the year and cash cash equivalents “overstated”.
Furthermore, the Court of Auditors points out that, according to article 17.1 of the 2022 Budget Act, once the final accounts are approved, the revenues obtained should “return to the Government and may not be used for other purposes during the budget year”. Auditors say that the Foundation should “deduct the results of the current and previous years from the amounts reimbursed to the Government” or, with the government’s authorization, “apply them to the financing of subsequent years’ activities”. However, according to ARI, “the remaining budgetary result corresponds to the portion of revenues from Andorra Telecom and FEDA financing intended to be used for the execution of ARI projects”.
Finally, while the report details a number of other minor irregularities, it also highlights that “the remuneration of its workers is a concept not covered by any regulation” and that “this situation was found in the remuneration of a party with temporary disability which is not covered by the CASS”.
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