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Ricky Zililo, [email protected]

HIGHLANDERS Football Club’s board and executive should bury the hatchet, find each other and use their energy to steer the Bosso ship which has survived many turbulences to emerge stronger.

On Sunday, Highlanders, who will be celebrating a century in three years and have been the epitome of astute administration in local football, had one of their worst financial statements in their history, with auditors issuing an adverse report.

After failing to present the financials at the January annual general meeting, Bosso treasurer Busani Mthombeni finally made his report, which financial experts have condemned as the adverse opinion does not present the fair financial position of the club.

To their credit, despite the bickering that happened, Highlanders managed to present their finances, something that other clubs don’t do.

With a deficit of about US$120 000, Bosso need to come up with ways to arrest leakages and have proper accounting systems, something that the auditors have indicated before.

Below are some of the views from the financial experts.
1) Revenue leakages due to lack of controls
– The club is likely to lose a lot of revenue both from sponsors and club activities e.g. sanctuary issue which confirmed a different figure from what is in the books and also understated rental income for the kitchen and parking. There is a serious risk of theft here.

2. Incompetent Treasurer
– Failure to prepare financials in accordance with Financial Reporting Standards as highlighted by the various omissions not complied with
– This has serious consequences on decision making as decisions may be taken based on misleading figures and expose the club to legal action.

4. Incomplete records and lack of evidence relating to financial transactions.
– Risk of fraud and theft as evidence is concealed, this brings the integrity of figures into question, this is a high risk area.

5. Non-performance of statutory reconciliations.
This has an implication on statutory payments done as there are no checks and balances. Risk of non-payment as the figures are unknown and serious risk of stiff penalties and interest from statutory bodies due to non-payment or incorrect.

6. Credit Risk
Trade creditors ballooned by over 150 percent against a backdrop of increased sponsorship which is weird. The situation is further compounded by non-performance of reconciliations meaning there is likelihood the figure may be higher and thus exposing the club to possible litigation.

The Auditor’s adverse opinion is a big red flag. The auditors have indicated that financial reports contain gross misstatements and have the potential for fraud.

This is very damaging to the club’s status and likely to impact negatively on sponsorship and potential sponsors. In some instances, this may lead to litigation as stakeholders panic on the state of affairs of the club.

Regulatory bodies may also scrutinise the audit opinion and the audit report to verify the information for accuracy and any impact on taxation matters and this usually comes with serious implications and a huge cost to the club.

The whole finance position is in shambles and more could have been concealed judging by lack of evidence for a lot of material transactions.

It’s baffling that most of the allowances were paid to the executive without the approval of the board. This is in violation of Article 13.4 (iv) of the Highlanders constitution on responsibilities of the board which reads; “In consultation with the Executive Committee, to set the rates of allowances to be paid to members of the Executive Committee and Board of Trustees and Directors.”

The financial statements showed that US$9 908 was paid in allowances, with US$450 going to the board.
Giving a breakdown, Mthombeni said US$1 100 was paid to the leadership that went for a European tour, with US$5 000 being sitting allowances for the executive.

The remainder which US$3 358 was what the executive shared from the 2022

Independence Cup prize money.
Corrective action needs to be taken to restore confidence to all the stakeholders and demonstrate that the institution is serious.

Why are there no systems to account for donations? You’ll also see that current year donations reduced significantly from previous year. In 2021 they had US$129 284 in donations compared to last year’s US$19 275.

Bosso must have systems to check on donations made on their behalf by the supporters’ groups or chapters.

Everything points to lack of structures and to save the club from further damage, Highlanders should ensure that they consider recommendations from the auditors to improve confidence with their stakeholders. — @ZililoR