The Tories failed to properly declare a total of £285,813 in campaign spending and failed to keep records in three by-elections during 2014.
Simon Day, the registered treasurer of the party at the time, had failed to ensure spending was accurately reported, and has been referred to the Metropolitan Police for one of two offences committed under the Political Parties, Elections and Referendums Act 2000.
The EC also said Theresa May’s party “hindered and caused delay to the investigation”.
In a statement the EC said:
The investigation concluded that there were significant failures by the Party to report accurately on how much it spent on campaigning at three by-elections in 2014 and at the 2015 UK Parliamentary general election.
The Conservative Party’s 2015 UK Parliamentary general election spending return was missing payments worth at least £104,765.
Separately, payments worth up to £118,124 were either not reported to the Commission or were incorrectly reported by the party. A portion of this amount should have been included in the Party’s return but wasn’t. Another portion was put into the Party’s return when it was candidate spending in a number of constituencies where the Party spent money promoting individual candidates.
In addition, the Party did not include the required invoices or receipts for 81 payments to the value of £52,924.
Finally, the Party failed to maintain records explaining the amounts it invoiced to candidates in three 2014 by-elections, for work on their campaigns. Therefore the accuracy of the amounts could not be verified.
Sir John Holmes, Chair of the Electoral Commission added: “Our investigation uncovered numerous failures by a large, well-resourced and experienced Party to ensure that accurate records of spending were maintained and that all of the Party’s spending was reported correctly.
“The rules established by Parliament for political parties and their finances are there to ensure transparency and accountability.
“Where the rules are not followed, it undermines voters’ confidence in our democratic processes, which is why political parties need to take their responsibilities under the legislation seriously.”
The Crown Prosecution Service (CPS) has been asked to determine if MPs should be charged over allegations party spending on an election Battlebus that carried activists to marginal seats was wrongly recorded as national spending.
The CPS has received files from files from 11 police forces.
This could affect several sitting MPs and election results could even be overturned if prosecutions follow.
Police and the CPS are not naming any MPs or agents who may be under investigation.
The party faces claims that accommodation costs of activists bussed into key constituencies around the country should have been recorded under individual candidates’ limits, rather than as part of the national campaign.
Claims about the Conservatives’ general election spending - as well as that at three parliamentary by-elections - were raised by The Daily Mirror and Channel 4 News. The party blames an “administrative error” for failing to register some accommodation costs.
Media are reporting that police interviewed South Thanet MP Craig Mackinlay last week as they investigate whether campaigners who were drafted in to campaign in marginal constituencies across the country broke the rules.
The Conservative Party has always maintained the Battlebus were a national expense.