Outstanding questions

We have not been able to confirm whether this practice also occurred in previous years.

It should be pointed out that the same auditors signed off the financial statements in both 2011 and 2012. The current board, no doubt in conjunction with the auditors, have now made the necessary change to accounting policies which has led to the ‘restatement’ of the 2011 results in the 2012 annual report.

Fortunately the ‘restatement’ included in the 2012 annual report has blown the lid on this practice and shown that the true level of ‘Corporate’ expenditure is consuming money that our rugby programs so desperately need!

This raises a number of important questions:

  1. Why did the ARU fail to previously disclose a significant portion of ‘Corporate’ expenditure to its stakeholders in 2011?
  2. How did the ARU justify ‘Corporate’ expenditure previously being deducted from revenue in 2011?
  3. Have ‘Corporate’ expenditures also not been disclosed using this method in previous years?
  4. The 2012 financial statements were signed on behalf of the board by Michael Hawker and Bill Pulver. The 2011 financial statements were signed off on behalf of the board by Peter McGrath and John O’Neill. Who made the decision for the change – was this something the new board drove or is this something the auditors insisted on?
  5. Having decided to make the change why did the current ARU board not feel a detailed explanation to its stakeholders was warranted, other than a couple of lines in the 2012 annual report that really don’t explain much at all?

The ARU may have been be totally compliant with accounting standards in 2011 and again in 2012 – the fact that the auditors signed the audit report in both years without commenting on this issue suggests they were. But as a stakeholder in Australian rugby, I want more from the ARU than just meeting the technical requirements of accounting standards – I want transparency, whether that shows good news or bad so we can all assess performance with all the information before us.

The current board of the ARU should be applauded for changing the accounting policies and increasing the disclosure of both revenue and expenditure across a wider range of categories so we can see a much clearer picture of the ARU’s performance, but that doesn’t remove the need to provide a detailed explanation of what happened in 2011 and possibly in other years too.

What we’ve sought to do here is explain to our readers what the ARU’s 2012 annual report shows. We can only report on the information published by the ARU in their annual reports. If the ARU want to provide further information to better explain the position we will publish that information as well.

Tomorrow I’ll publish my benchmarking of the ARU’s financial and operational performance against the NZRU which again demonstrates how the ‘Corporate’ overheads of the ARU are consuming funding that should be directed to the development of the game.

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Scott is one of our regular contributors from the old days of G&GR. He has experience coaching Premier Grade with two clubs in Brisbane.

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