Cycling South Africa president William Newman has responded to reports of “unlawful acts or omissions” in the federation’s 2016 financial statements.
According to these, Newman had said funding received for specific projects had been used elsewhere to cover priority projects.
He spoke to In the Bunch and explained that “cross-subsidisation” had occurred as a last resort and that all funds received had ultimately been used for the purposes they were granted for.
“At times funding earmarked for a specific project is not received timeously and we have to execute the project at the planned time. We then are forced to cross-subsidise as a short-term measure to overcome this short-term cash flow situation.”
He said that once the cash flow issue had been resolved, funds were immediately re-allocated to the original project.
“The alternative of doing nothing and waiting for funding to become available would mean that we fail our riders,” he said.
Cycling SA’s financial plight is no secret and Newman said they had been working hard to correct the situation, relying solely on income from membership fees, levies, sponsorships and grants.
Newman said they would also be using their non-profit organisation status to raise funds, embarking on membership drives and engaging with potential partners to attract sponsorship.
He said these had been ongoing struggles as willing sponsors were hard to come by.
“We’ve also had to contend with erratic income streams due to partners also feeling the financial crunch. This is one of the main reasons why we now find ourselves in this uncomfortable position.”
To rectify this, Newman said the national federation was working on their day licence and levy collection processes to ensure “fees due to us are received”.
Other steps taken to improve their financial situation include:
• a complete moratorium on any travel – local and international;
• critical evaluation of all expenses and service providers;
• the formation of a Finance Review Committee to oversee their finances and guide them to a level of sustainability;
• reinforcing the principle of pre-approved funding for any projects or expenses; and
• tightly controlled budgets with no expenses approved without available funding.
While their work continues, Newman said the appointment of treasurer Robert Booth would go a long way in enhancing and strengthening financial controls.
Cycling SA have been without a treasurer for roughly two years as it is a volunteer position.
“No one was prepared to take on the position, but we now have an experienced chartered accountant and businessman in Robert Booth,” said Newman.
Booth, who was officially appointed at the end of June, said the shortfall of funding was not as a result of any excessive spending.
“There has been no misappropriation of funds and, as far as I can determine, there’s no embezzlement and there’s nothing where people who shouldn’t have been paid have been.
“The bottom line is that there’s not enough money coming into CSA.”
Comment from Booth to follow shortly.