IT'S amazing how a subject on sports, especially rugby or soccer can start a conversation.
Even if it's a business function. This I encountered the other day when I settled on my seat at the Vodafone Fiji Sales and Service awards night at the Novotel Convention Centre in Lami on Saturday.
Soon after the introductions were over the Courts Homecen-tres representative next to me said he had been following with interest the rugby column in The Fiji Times about the woes up at rugby house.
After a thank you I replied with what my friend, an investor from Brisbane, Jim said: "You know money can make people do funny things."
You can guess for yourself what he meant by funny.
But just to make sure I had not offended the friend from Courts I said -- you know there are just stories on governance and transparency by people who by their holding office have become public figures.
"Well that's nothing new, it happens in almost all sporting bodies where people are involved with finance," he said.
It seemed like business as usual and there was a more interesting conversation when I hadmet up with Shailendra the top salesman from the giant mobile phone communications which had offered a whopping $8.07million sponsorship to the Fiji Rugby Union. He told me the company would not pursue its proposal because it might be perceived as "sour grapes".
"We'll just move on but for the benefit of the rugby public it would be good for the current sponsor with FRU to show on the table what it has to offer to help rugby," he said.
Based on Vodafone's proposal compared to FRU's net deficit of $770, 425 suffered in 2008 that was fair enough comment.
Because unless the Board can face the challenge to secure a major sponsor the financial woes at Rugby House will worsen.
And it seemed whenever there was an opportunity for a break from the formal function in Lami the rugby topic surfaced.
After dinner Mala and I grabbed a few minutes to talk about how the sons were progressing at school and to add a bit of humour he mentioned how Vilikesa told him that Viti FM and The Fiji Times were now in the FRU's bad book.
He said the FRU's operations manager was not happy with reports and interviews conducted by the two mediums.
I replied that the guy as a former media person should at least know "bad news makes good news and that's what sells in our line of business".
And as we shared a few light moments over it I remember the sentiments expressed by the FRU Board chairman Viliame Gavoka who said everyone had an opinion when it came to rugby be it against the game or at the Board.
It was in one newsroom that I heard the Editor before sending us out assignments say; Opinions are like noses, everybody has one go, so go get them.
And if you have been following this column there has been many sentiments expressed by experts of the code, critics, yours truly and from those given the so-called mandate to run the show at the white house on Gordon Street.
Among the calls being made in the name of rugby as the institution goes through some turbulent times was the appointment of a Chief Executive Officer and a Marketing Manager.
Based on the report you will read it is clear why the FRU must also recruit a financial controller because it was now operating a multi-million dollar operation.
Former CEO Timothy Daniel said there was a need for a marketing and business plan to complement the strategic plan.
Last year the FRU appointed a committee to conduct a review of the governance of FRU.
Its conclusion was published last Wednesday and Thursday. Today we look at Finance.
The committee's report began by saying the overall management of the organisations's finances is well below acceptable governance standards.
The effect this is having on the ability to manage the operations within budget is very serious.
In its summary recommendations the committee tried to deal with the concern.
The financial reports provided to board meeting are crude and lack meaningful data necessary to make sound financial decisions.
There is no attempt to provide monthly reports on variances between budgeted income and expenditure and this is a major flaw that must be remedied without delay.
Without this information the directors cannot do their job. Nor can they make informed decisions on what steps need to be taken to improve the financial position of the organisation.
In short the entire budget/income/expenditure process is being ignored and financial decisions are being taken as hoc based only cash on hand and anticipated income from sponsorship, gate takings and IRB.
The fact that the board has tolerated this situation for so long indicates that the directors need further training on the responsibilities of directors and skills required to understand financial statements.
Also, debtors and creditors are not aged so the Board is not in a position to understand the true nature of the organisation's payment and collection history.
The current cash flow situation requires debtors to be strong focus but this is not receiving the required attention by the Audit Committee or at board level.
There are also a number of unsecured loans to staff, players and former players and a sizeable portion of this debt is more than one year old.
This practice may contravene money lending laws and is not covered in any policy manuals.
Most recent accounts at June 30th 2008 show staff and player/coach advances outstanding of $17,281.
These are shown in the accounts under Other Assets but should more correctly be listed within debtor's ledger with action and/or diary notes on file detailing repayment arrangements.
As an employer the FRU has certain regulatory obligations to fulfil but these do not extend to money lending. Management should look to dispensing with this practice.
Management must take a stronger and more responsible hand in the preparation and submission of reports and recommendations.
Directors must be more accountable for the responsible managing of the organisation's finances.
It is pointless to impose budget processes and then ignore the expenditure variations.
This suggests that the organisation is not operating within its means.
nNext week: Why, by legal means FRU House should be closed.
