John Coates’s AOC costing methods queried

AOC president John Coates has claimed his organisation’s revenue is substantially higher than its reported figures.

John Coates has claimed the Australian Olympics Committee’s total revenue is substantially higher than reported. Picture: Getty Images

AOC president John Coates has claimed his organisation’s total revenue is substantially higher than its reported figures, in an ­attempt to defend the amount of money it spends on itself.

The Australian Olympic Committee has been stung by the revelation that it spent 52c of every dollar earned between the London and Rio Olympics on its own administrative expenses, including Mr Coates’ personal consulting fee of $717,500 and more than $500,000 to maintain its Sydney Harbour headquarters.

In a statement issued to the heads of all Olympic sports and his fellow AOC directors — the people who will next month vote on whether he keeps his job — Mr Coates accused The Australian of ignoring in its financial analysis deferred income from sponsorships that will flow to the AOC in future years.

“Mr Le Grand’s calculation ­ignores income from sponsorships secured during the 2013-2016 quadrennium in relation to future quadrenniums, which is deferred (and discounted) to be recognised in the quadrennium to which it relates,’’ Mr Coates wrote.

According to Mr Coates’ statement, this lifts the AOC’s revenue for the past four years from the $89 million figure cited by The Australian from the AOC’s own annual report to a figure of $115m.

Under this equation, the AOC spent 33.4c in the dollar on ­administrative expenses — a ratio marginally higher than ­accepted best practice for not-for-profit organisations. To arrive at these figures, Mr Coates compares past spending with past and future revenue.

Read the full statement below.

A former partner of a major accounting firm familiar with sport finances said the method used by Mr Coates failed a basic rule of accounting; matching revenue and expense from the same time period. “This calculation of revenue in the context of the 2013-16 financial period does not conform to Australian Accounting Standards, Generally Accepted ­Accounting Practices nor the AOC’s adopted accounting policies,’’ the accountant said.

Mr Coates’ total revenue figure of $115m was not included in the AOC annual report published yesterday.

The Australian this week ­revealed the AOC provides fewer funds to athletes and sports than Commonwealth Games Australia despite generating twice the revenue of the CGA through sponsorship and a $146m investment fund.

Andrew Abercrombie, a former Victorian Liberal Party treasurer and the chairman of Flexigroup, an $868 financial services company, also questioned the accounting method relied on by Mr Coates.

He said the AOC’s defence against criticisms of its spending priorities did not explain the ­“appallingly trivial’’ amount it gave Olympic athletes and sports. “An organisation which should be 100 per cent focused on the welfare and opportunities for sports people appears to be using disproportionate amounts of its revenue to feather the nest of the key people,’’ he said.

In his statement, Mr Coates said that at the end of the London Olympics, the AOC stood to earn $11.8m in future years from sponsorship deals already in place. That figure has ballooned to $47.3m.

The success of the AOC in ­attracting more lucrative sponsorship deals raises a new, thorny question for Mr Coates from sports who haven’t seen any extra cash flow to them or their ­athletes.

Australia’s shrinking medal tally means the AOC will give fewer funds to athletes under its medal incentive scheme in the lead-up to Tokyo in 2020 than it did in the four years before Rio.