Dutch Board breaks even, but faces an uncertain financial future

KNCB treasurer Mudi Allah Rakha knows that he has a tough task ensuring a degree of continuity in the organisation’s financial affairs.

He is the only member of the previous Board, which imploded a year ago, to serve in the new one.

But he is very happy with the way in which the new team, led by chairman Guido Landheer and chief executive Monica Visser, is able to present a united front even when things get a little tense, as they did during the discussion of the finances at the recent general meeting.

‘I undertook to present the financial statements in a more accessible and transparent form,’ he said this week, ‘and that is what we have done.

‘We have been talking with the ICC, with our accountants and with some of the club chairmen in order to make our financial reports as clear and straightforward as possible, and I believe we have done that.’

Although he was challenged over some aspects of his report in the general meeting and in the financial briefing session which preceded it, Mudi is happy that the club representatives generally seemed content with the way in which the Board was managing its resources.

One bone of contention was the sum of €330,000 which appeared in the profit and loss account as income and which therefore represented the surplus for 2022 almost in its entirety.

The difficulty was that this was an ICC grant which had initially been paid in 2018 and 2019, and which had perhaps needed to be repaid when it was not spent as originally intended. The 2020 result was therefore charged with a provision for the expected repayment.

Once it became clear, however, that the ICC did not expect this sum to be paid back, it became necessary in accounting terms for it to be shown on the plus side in the 2022 result.

‘Our accountants have insisted that this is the correct way to deal with the problem,’ says Mudi, pointing out that when the €330,000 is discounted, the actual result for the year is almost identical with the break-even outcome envisaged in the budget.

‘As I stated in the financial report and repeated at the meeting,’ he continues, ‘we must also allow for the loss which the BV’ – the limited liability company which the KNCB set up to run its major events – ‘incurred during 2022.

‘We have not yet finalised those accounts, but we anticipate that the BV’s deficit will be in the vicinity of €120k.’

Although the break-even bottom line corresponds to within €64 of what was budgeted, the overall operational income and expenditure is around €250k. higher than anticipated, and this too came in for some unfavourable commentary in the general meeting.

Mudi is unapologetic.

‘We explained fully why we made the decisions we did,’ he insists.

‘We faced additional costs, which were fully covered by the ICC, because our men’s team reached the second phase of the T20 World Cup in Australia, and there were unanticipated one-off costs associated with staffing and with the preparation of our new premises at the VRA club in Amstelveen.’

The increase in income and expenditure was also explained in part by the fact that the Bond did much better than expected as a result of the exchange rate between the US dollar, in which ICC grants are paid, and the euro, netting some €210,000.

The Board is in no doubt that it has the constitutional power to incur additional expenditure in the course of the year, subject always to its retrospective accountability to the Finance Committee, a sort of internal auditing body elected by the general meeting, which has to sign off the accounts at the end of the financial year.

And it rejects completely the claim, made at the meeting, that additional spending over €100k. has to be approved in advance by a general meeting.

‘That provision relates to specific contracts,’ Mudi points out, ‘and not to general expenditure.

‘In no case did we spend anything like that sum in a single transaction.’

On one point Mudi is in complete agreement with his critics: the financial outlook beyond 2023 is sombre, with the ICC’s abolition of the Super League and uncertainty about the future level of ICC grant income.

‘Of course we need to have a longer-term financial vision,’ he says, ‘and in fact Monica Visser and I have been working on exactly that.

‘We will be bringing a provisional multi-year budget to the Board in the New Year, with a view to presenting a longer-term projection to the next general meeting in April.’

As chairman Guido Landheer set out in the meeting, the Board is pursuing a three-pronged strategy, negotiating with the ICC over competition structures following the abolition of the Super League and the grants associated with them, seeking a significant increase in sponsorship income, and looking for ways in which economies can be made in the KNCB’s current organisation.

‘From my experience working in NGOs,’ Mudi observes, ‘I know that it is unhealthy for an organisation to be too reliant on a single income source, and for a long time we have been too dependent on the ICC.

‘We need to diversify our income streams, not only through sponsorship but also through a greater contribution from bodies like the Dutch Olympic Committee, NOC*NSF.

‘We will be doing everything we can to ensure that we have the resources to fund our policies in both participation and high performance, because the path to financial security involves both growing our playing numbers and achieving continued success on the field.’

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