Turbulence (then calm sailing, then turbulence) thread.

[nogbad]

. i think i can now answer my own question as an email just received from the OSC states that Kathryn Duncan has been installed by Peter Storrie as the Club's Financial Director

Bruce Stalder was appointed chief executive/sales director, Kathryn Duncan the financial director while Tony Walmsley was named technical director - all to work with Storrie, who reports directly to club owner Mike Charlesworth.http://www.smh.com.au//breaking-new...t-exenglish-football-exec-20150219-3qk2v.html

 

[bikinigirl]

I find it a bit hard to believe no one knew how much money we were losing. I've heard M Charlesworth say $1 million a season. I think it was a fans forum.
I'm sure M Charlesworth wasn't that naive when he took over from P Turnbull to know how we were, or weren't going financially.

. why do you find it hard to believe? have you spoken to the CEO or Commercial Manager?

. there is a reason that every time a 'break-even crowd number' is mentioned it is a different bloody number ... and vastly different sometimes. assessing the 'loss' is probably handled in a similar manner only further confused by the COE

 

[VicMariner]

Great noises since Storrie arrived. Three year commitment is a bit off though.
If he can get the finances in order and Walmsley can get the football firing and they ramp up the community engagement, in three years we might be going gangbusters and moving will be a bad memory.

 

[nearlyyellow]

It's a dog's name, as in, "I promise I won't shoot your dog".

Hmm dibo, I picked you as a cat person, so the analogy doesn't seem to fit.

 

[nearlyyellow]

. why do you find it hard to believe? have you spoken to the CEO or Commercial Manager?

Well, that's a bit harsh bg. Have you? Spoken to the CEO or Commercial manager to prove that it's *not* hard to believe? I too find it almost unbelievable that the owner of any business would commit, reportedly, at least $1m. pa. without having to hand all the usual financial tools and records with which to run the business,, budgets, marketing plans, P&L's, Balance Sheets, the whole gamut. In fact it absolutely defies belief. MC really needs some hand holding by PS if that's believable, imho.

 

[dibo]

I simply don't believe the "nobody knows what the losses were" bit. The company reported audited accounts to ASIC, the auditors wouldn't have signed the accounts if they didn't think it represented a true and correct record.

 

[MagpieMariner]

I find it a bit hard to believe no one knew how much money we were losing. I've heard M Charlesworth say $1 million a season. I think it was a fans forum.
I'm sure M Charlesworth wasn't that naive when he took over from P Turnbull to know how we were, or weren't going financially.

As i said before NSO is a woeful place for football. Brookevale would have been better.

Brookvale not bloody likely. Apart from being a bitch of a place to get to, especially if you have to rely on public, but the state of the playing surface... Even the Ugly League guys are criticising it.

 

[nogbad]

. why do you find it hard to believe? have you spoken to the CEO or Commercial Manager?

. there is a reason that every time a 'break-even crowd number' is mentioned it is a different bloody number ... and vastly different sometimes. assessing the 'loss' is probably handled in a similar manner only further confused by the COE

why do I find it hard to believe. Well both Peter Turnbull & Mike Charlesworth are both very successful business men. I can't see how either would be in any kind of business
and not looking at the books. Besides Mike Charlesworth said at at fans forum he was putting in a million dollars a season to keep the club afloat. Therefore at that time the
club would I suspect have been losing a million dollars a season.

No I haven't spoken to anyone at the club regarding the financial situation. I doubt they would discuss it with me anyhow.

I was only thinking of Brookvale being better than NSO from a spectators point of view. Right shaped pitch and better seating.
I don't follow rugby league at all, so I would have no idea about the state of the playing surface.
And as for public transport, well I would have been driving there anyhow.

 

[bikinigirl]

Well, that's a bit harsh bg. Have you? Spoken to the CEO or Commercial manager to prove that it's *not* hard to believe?

Harsh? Perhaps but what has surprised me is the response. I don’t think it is a matter or ‘proving it is hard to believe’ because it is just an opinion.

I didn’t read the article as if the owner didn’t know … but the staff running the business, with nobody in a dedicated financial role it didn’t surprise me. Audits and things are out-sourced (and often completed after the proverbial horse has bolted) plus the article reads as though Charlesworth just comes in with more money when needed – this money may be sourced in different ways. Having spoken to the ‘suits’ – no, I was not surprised … and they will not engage in talk of financials.

I’d also suggest people remember a few things from recent memory and ask how easy it would be to keep track of the financials of the Club considering:

• Player and staff payments being late
• Unpaid superannuation
• Debts owing to CCF, Council, Wyong RSL, CoE contractors and money owed for the scoreboard and the ATO … with the amounts often in dispute
• Contractual obligations not being met … Big Pat is the most newsworthy (Mikey’s situation was murky to me and Mossy will probably experience some issues too)
• Staff being ‘moved on’ to the Football School
• The potentially complicated relationship between the CoE and the Club

I’d suggest even the most accomplished financial guru would struggle with some of that … but with no dedicated financial controller and ‘issues’ spanning ownership changes and multiple reporting periods and the income cycles of a football club I am not surprised at all.

People suggest that both Turnbull and Charlesworth are successful businessman … but that doesn’t hold much water in this context. Charlesworth’s focus is obviously elsewhere and as Turnbull’s business struggled so did the Mariners – Turnbull is due some credit because he may have lost it all trying to keep the Mariners going.

To me the Club is still a bit of a play thing for Charlesworth. He may not be Manchester-Melbourne rich, but he is doing well enough to throw money at the Mariners without full focus. Some have argued that he runs the Club like a business but in some ways he doesn’t run it enough like a business.

Very few businesses can be successful without the right resources and the Mariners have always been under-resourced or poorly resourced … and this applies to the ‘back of house’ as much as anywhere.

I still find it interesting that the ‘cost saving’ phase of Storrie’s plan has seen more staff appointed and more engagement with stakeholders – that provides some context I feel. A successful business needs to listen to its stakeholders and I wonder whether Charlesworth's other businesses do that better.

 

[nearlyyellow]

Please bear with me for a moment, boring stuff follows. In Australia AFAIK clubs, registered organisations, incorporated bodies are required to use an accrual system of accounting. This would mean that at the end of a reporting period, say the EOFY, the body's accounts would be signed by an appropriate officer of the body as being a true and correct picture of the state of affairs of the body as at that date. All known liabilities and all known income for that period would have to be included. The auditors (yes, always an outside body, because an internal audit would not suffice) would examine the books and records of the body and, having satisfied themselves as to the correctness of the information, sign the accounts. There are also contingent liabilities to be noted in the accounts which may identify the possible extent of any liabilities to the Council and others, if not already included in the accounts.

So *someone* signed the accounts for CCMFC, and the auditors signed the accounts, and it's highly unlikely that the the majority shareholder didn't know the financial status that those accounts disclosed.

Cash flow is a different thing. Knowing what a liability is and paying it on time are two different matters. I would suggest that the late payment problems you refer to are the result of cash flow considerations by the source of those funds, MC.

I've known a lot of wealthy entrepreneurs in my time, and quite a few of them were very reluctant to pay stuff on time, shuffling funds around to wherever they made the most income. They could pay everything on the spot, but they didn't. And that points out a major part of the problem, If CCMFC is a loss making entity why wouldn't the financier be reluctant to open up his wallet again and again. It would absolutely give you the cranks. You know the old saying, throwing good money after bad? Some of that there maybe?

So a lack of staff resourcing aside, given the legal and reporting requirements, I still find unbelievable that the owner of the business did not know the financial position of that entity.

(No more accounting discussion from me, I'm done! )

 

[sydmariner]

Brookvale not bloody likely. Apart from being a bitch of a place to get to, especially if you have to rely on public, but the state of the playing surface... Even the Ugly League guys are criticising it.

I heard the other night that the other night @ the nrl game there they had to pour sand on the field @ 1/2 time

 

[dibo]

BG - what NY says. I run a business that some time ago was very tight for cash and not in great shape. It's now in good shape, but we *always* knew what we owed and to whom, it was just the tricky matter of having the cash to pay them that was hard.

Cashflow projections are hard as well, especially when you're talking about variable incomes (e.g. is this week's crowd going to be 5k or 10k?).

Your auditors simply won't sign the books off if they're not confident that you're accurately presenting what you earnt, spent, have, owe and are owed. ASIC gets very antsy about this too.

This is completely separate to the 'going concern' question - is the entity likely to be able to meet its debts as and when they fall due. We appear to have had issues relating to solvency, that's where Mike sticking his hand in his pocket comes in. That means that there are ongoing injections of capital (cash) to ensure we meet our obligations, and that's going to get tiresome but it's not the same as not knowing what the books look like.

 

[adz]

To me it sounded like someone buying advertising or whatnot for an upcoming game not having a budget to work within? You wouldn't expect everyone in the company to know the bank balance or profit loss for each quarter but at least have an amount of money allocated to them.

I can tell you from experience and talking to others who have had sponsorship; invoices sometimes don't get issued, companies don't get chased up from one year to the next, so just based on those facts it isn't a big jump to assume there isn't (wasn't?) a whole lot of organisation with money/accounts.

 

[Yoda]

Invoices were (not sure if they still are) generated in a MS Word document, not from an accounting/bookkeeping software package. Quite easy to lose track of whats going on with a system like that.

 

[midfielder]

Please bear with me for a moment, more accounting discussion from me

Music to my ears

 

[nearlyyellow]

We're not talking here about a backyard business with a gross income of a couple of hundred thousand $'s. That's a case where the sole trader for instance may lose track of invoices issued, not likely, but maybe. There's a raft of real cheap accounting programs out there which assist small traders by doing absolutely everything needed to control the business, invoices, debtors, suppliers invoices, creditors, ledgers, bank accounts, and cash flow reports. Most public accountants/tax agents would insist that their clients use one of those programs, partly to reduce the clients costs with the accountant etc., but also as a client service.

Bear in mind that CCMFC is a fairly large concern with a gross income of, I dunno, $6m. + ? Word pro'ing invoices isn't the best of ideas but if proper systems were in place then pre-numbering would occur, probably a spreadsheet used to tally up the various invoices in sequence and a whole range of other things to ensure that the accounting is as near to correct as possible. I mean, it just *has* to be as near to spot on as possible. The legal penalties, not just for the proprietor, for getting it grossly wrong, as some are suggesting, just do not sound like a correct version of what's happening in the back office, imo.

Adz, it probably is possible for an invoice to be missed issuing. Say the Sales/Marketing dude/dudette forgets to hand on the invoicing instructions for minor signage to the Accounts/Money dude/dudette then the invoice will not be issued.

To cover that kind of possibility a sensible plan of attack for say a Storrie type of Financial Director is to have an Organisational Chart for the business, and also an Operations Manual, showing each employees duties and responsibilities. With a business the size of CCMFC I would think any prudent Finance Director would put those two things in place, if only to cover his own arse and show that he is doing an effective job. That way if an invoice is missed the responsibility for missing the income can be isolated and improvements or (ahem) employee counselling put in place. And if I were the newly appointed Financial Controller? mentioned by BG I would ask or suggest to Storrie that that should be a starting point to get the back office organised.

(That's it! Definitely definitely No more accounting discussion from me, I'm really done! )

 

[nearlyyellow]

Music to my ears

Mmmpphh, sorry Middy, I was typing another over long missive when you shotgunned me. But I sorta felt it was important to bury some of the grounds for financial ineptitude that have been mentioned.

EDIT: Oh, I forgot, that's your game, isn't it? And of course you like it! OK. How about some input from you then?

 

[Roy Law]

We're not talking here about a backyard business with a gross income of a couple of hundred thousand $'s. That's a case where the sole trader for instance may lose track of invoices issued, not likely, but maybe. There's a raft of real cheap accounting programs out there which assist small traders by doing absolutely everything needed to control the business, invoices, debtors, suppliers invoices, creditors, ledgers, bank accounts, and cash flow reports. Most public accountants/tax agents would insist that their clients use one of those programs, partly to reduce the clients costs with the accountant etc., but also as a client service.

Bear in mind that CCMFC is a fairly large concern with a gross income of, I dunno, $6m. + ? Word pro'ing invoices isn't the best of ideas but if proper systems were in place then pre-numbering would occur, probably a spreadsheet used to tally up the various invoices in sequence and a whole range of other things to ensure that the accounting is as near to correct as possible. I mean, it just *has* to be as near to spot on as possible. The legal penalties, not just for the proprietor, for getting it grossly wrong, as some are suggesting, just do not sound like a correct version of what's happening in the back office, imo.

Adz, it probably is possible for an invoice to be missed issuing. Say the Sales/Marketing dude/dudette forgets to hand on the invoicing instructions for minor signage to the Accounts/Money dude/dudette then the invoice will not be issued.

To cover that kind of possibility a sensible plan of attack for say a Storrie type of Financial Director is to have an Organisational Chart for the business, and also an Operations Manual, showing each employees duties and responsibilities. With a business the size of CCMFC I would think any prudent Finance Director would put those two things in place, if only to cover his own arse and show that he is doing an effective job. That way if an invoice is missed the responsibility for missing the income can be isolated and improvements or (ahem) employee counselling put in place. And if I were the newly appointed Financial Controller? mentioned by BG I would ask or suggest to Storrie that that should be a starting point to get the back office organised.

(That's it! Definitely definitely No more accounting discussion from me, I'm really done! )

Love your work, mate. Some of us are interested. I used to run a business some years ago, employing more than a hundred people, I was appointed MD without any prior training. The most important lesson I learned was to 'know the numbers'. Only when I had the costs reduced and under control could I drive the business forward into consistent profit.
My gut feeling is that the finances of the Mariners has been in a mess since the oily rag days of Turnbull, and Gorman. They were cute enough to get by the legal requirements (although the ATO wasn't always happy) but were always winging it, e.g. the dispute with the Council over payments for the electronic score board. Charlesworth sounds as if he has a eye for a deal but not the detail and found he had bitten off more than he wanted to chew. The appointment of Storrie, an outsider with no axe to grind, might be his, and the club's saviour.

 

[nearlyyellow]

Charlesworth sounds as if he has a eye for a deal but not the detail

Well he must be a fairly astute businessman because after all he got to the position he is from telecommunications, although I can't find out what branch of telecommunications that was. Suffice to say he may not be a dumb bunny, but any bright bloke has to have the best of financial advice and a good team surrounding him. Maybe CCMFC has been run in the past in too much of a "clubby" sort of a way, and not in a proper business manner.

The appointment of Storrie, an outsider with no axe to grind, might be his, and the club's saviour.

I am hoping that this is the case. I admit, initially I had my reservations about Storrie's appointment, but the last few weeks have turned me around to being quite hopeful that he will guide the club in the right direction.

 

[nebakke]

I'll admit, it's not my area - at all - I try to not touch anything with the cursed Microsoft moniker, if I can avoid it but I still thought that it was worth pointing out that, the end-product coming out from a Word template, isn't the same as some keyboard-monkey sitting there keying in all of the contents.
Macros, mail merges and even (shiver) MS Access can provide quite a bit of the functionality of some of the accounting packages. Whether it'll also be PCI compliant and industry approved - I don't know... And historically you'd want to make sure that you have no more than something like 400000 entries... But if you can ensure that, it's not necessarily a problem... Depends on the quality of the person setting up the software

Mind you, if that person is recommending MS Access for ANYTHING other than a coffee coaster, questions should perhaps be asked... But I'm pretty sure you could do the same thing with any sort of *SQL, ODBC and a decent driver... In fact, come to think of it - I think the finance people at work do something similar through Concorde or SAS or whatever it's called... Something about airlines or airplanes, no?