Mystery behind Mudgee Race Club’s missing cash divides bush community: Investigation
With thousands of dollars missing from Mudgee Race Club coffers, Racing NSW had a choice – shut down one of its most successful country race clubs or give directors the benefit of the doubt. Why they chose the latter was a mystery – until now.
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Hundreds of thousands of dollars allegedly went missing from one of NSW’s most successful country race clubs and it only narrowly avoided going under after Racing NSW granted it the benefit of the doubt.
The Sunday Telegraph can reveal the mysterious case of the missing cash, which an auditor suggested was misappropriation but the club put down to poor bookkeeping.
Mudgee Race Club is a jewel in Country Racing NSW’s crown. Between 500 and 3000 punters flock to the track in the Central West wine region several times a year for race days supported by top-tier sponsors. Despite its popularity, before 2016 it was handling its finances like a school tuck shop.
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An audit of the club in 2014 and 2015 identified systemic shortfalls on the club’s balance sheets, years of missing invoices, annual general meeting minutes and petty cash reconciliations.
Between 2013 and 2015, an auditor raised serious concerns with discrepancies between the alcohol the club was buying and the price it claimed it was selling it for at race days.
In 2015, the club purchased $58,000 worth of alcohol yet recorded only $79,000 in bar sales. The auditor found it should have been around $216,000. Gate takings didn’t match up to attendance numbers either, the auditor found.
In a letter to the club secretary Colleen Walker in 2015, the auditor suggested the “significant issue may imply misappropriation of funds”.
“This is not a minor discrepancy,” the letter stated. “It is my understanding that this matter has been referred to the police and is being investigated by Racing NSW.”
This grim assessment followed a similar letter a year earlier from the auditor to Mrs Walker, warning about discrepancies in food, bar and admissions and that “serious changes were needed”.
In February 2015, the club committee held its annual general meeting and disputed the auditor’s findings.
According to minutes from the meeting — filed with the Department of Fair Trading — the auditor’s report was discussed and an explanation was provided about “the use of cheque books and deposits” without “reflecting the activities of the club”.
The murky matter divided the club. It is understood two committee members, including the treasurer who was an accountant, resigned over the way it was handled.
The auditor, Joe Hurn, declined to comment and referred The Sunday Telegraph to his financial reports filed with Fair Trading.
In May 2015, Racing NSW chief executive officer Peter V’landys sent a letter to then-club president Max Walker stating a “serious and credible” complaint about the club’s finances had been reported to police. NSW Police had asked for Racing NSW’s assistance, he wrote.
About the same time, a four-person audit team from Racing NSW showed up at one of Mudgee’s biggest meets — the Goree Race Day Cup — unannounced.
The audit team identified “very sloppy” processes and ample opportunity for theft or for people to skip paying entry, a source confirmed.
Racing NSW estimated the shortfall was a total of $60,000-$70,000 while the auditor stated it was between $150,000-$200,000 a year.
Racing NSW confirmed it issued a “show cause” notice to the club directors requiring them to show why an administrator shouldn’t be appointed to run the club.
The club’s president Max Walker and his wife, secretary Mrs Walker, fronted the Racing NSW Board to plead their case. The couple have been heavily and voluntarily involved with the race club for decades. Mr Walker is a well-known businessman.
Racing NSW and a subcommittee formed to deal with the investigation weighed up its own audit findings with the explanations from the Walkers.
Although it was clear there was money missing, there was no evidence to pursue anyone connected to the club for fraud.
“Racing NSW thoroughly investigated the accusations when we were first made aware,” chief operating officer Graeme Hinton said.
“While we identified poor internal controls that needed to be rectified, there was no evidence of any fraudulent activity.” Mudgee Race Club remained in the committee’s control — under the close watch of Racing NSW — but Mr and Mrs Walker were banned from serving on the board together.
A former committee member who was present during the tumultuous period said it was generally accepted it was a “storm in a teacup … We had an inquiry with Racing NSW and after a few months it was all tidied up and put to bed”.
Approached last week, Mr Walker, who is on the board of Racing NSW Country, said the club had been his life.
“There nothing found to be wrong but I would say that the bookkeeping was shocking but there was no money missing,” he said.
In a small town like Mudgee, the missing money still emerges in conversation.
“I have been fronted by many people asking what has happened with Mudgee Race Club,” former mayor Percy Thompson, who is the president of the Gulgong Turf Club, said.
Mr Thompson said a Mudgee Race Club lifetime member first approached him about the matter in around 2015 and, unbeknown to him, it had already been reported to police.
Mr Thompson claimed when he asked a local detective for an update on the investigation, he was told it was not going ahead.
Racing NSW handed its findings to NSW Police, which have scope to seize financial records, like personal bank statements.
It is unclear whether that avenue was pursued. NSW Police did not respond to questions before deadline.
Originally published as Mystery behind Mudgee Race Club’s missing cash divides bush community: Investigation
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