Audit concludes Archer made up charity total

More than half the £57m Lord Archer claims he raised for the Kurds in his 1991 Simple Truth appeal appears to have been a figment of his imagination, an investigation into the charitable campaign has concluded.

The British Red Cross said on Friday that an independent audit of the cash showed no donations were handled by Archer and any misappropriation was "unlikely". But KPMG, the accountancy firm that ran the investigation, said it could find no evidence to support Archer's claims to have raised £31.5m from overseas governments.

When investigators met the former chairman of the Conservative Party at Wayland jail in Norfolk in July, he was unable to give them details of the sources of the £31.5m.

Questions were first raised over the Simple Truth appeal in July by the Liberal Democrat peer Baroness Nicholson. Within days of Archer being jailed for perjury, she wrote to the Commissioner of the Metropolitan Police alleging that "hardly any" of the money raised by Archer, who was fronting a British Red Cross campaign, actually reached the persecuted Iraqi Kurds for whom it was intended.

After the KPMG investigation cleared Archer and the British Red Cross of misappropriation, Archer's wife, Mary, said: "My family and I are delighted, but not surprised, that KPMG's investigation into the Simple Truth campaign, spearheaded by Jeffrey in 1991, has confirmed that no funds were misappropriated by him or anyone else. We have known this from the outset."

The accountants are unequivocal in their satisfaction that the British Red Cross and Archer can account for every penny paid in the UK.

"KPMG have no concerns as to the accuracy of the figure of £13.8 million raised by the British Red Cross Simple Truth Appeal in the UK," their report says. "The donation handling procedures appear to have been sound and ... the figures tie in to the 1991 audited accounts and underlying accounting records."

The report adds: "Archer had no role to play in collection of funds by the British Red Cross; he had no signing powers or any role in cash or funds handling at the concert and no role in deciding the distribution of the funds. Archer incurred personal costs for which he received no refund, and he gave a personal guarantee for $200,000 to underwrite the concert should it not have covered its costs.

"KPMG have found no evidence of misappropriation and consider it highly unlikely."

Overseas, however, Archer's claims of the amount raised remain unclear. The Simple Truth claim was that £11.7m had been raised from public and corporate sources and £31.5m from overseas governments. By contacting foreign Red Cross societies, KPMG managed to account for £10m of the £11.7m claim, but when it came to the £31.5m it said: "KPMG have been unable to verify the figure of £31.5m and have seen no analysis of the build-up of this figure or contemporaneous supporting documentation. It appears that the British Red Cross substantially relied upon Archer to provide the figure ... when KPMG met Archer in September 2001 he was unable to recall the breakdown of the £31.5m.

Sir Nicholas Young, chief executive of the British Red Cross, said: "I am pleased that KPMG has found no evidence of misappropriation. With regard to the funds raised and disbursed overseas, the KPMG report helpfully explains which figures were not sufficiently documented and which were not presented with sufficient clarity."

Lady Nicholson declined comment until she had studied the report fully. The Metropolitan Police said it would launch a "preliminary assessment of the facts" from the KPMG audit but was not investigating the Simple Truth fund.