As not-for-profit sporting organisations navigate the complexities of securing long-term sustainability, one area that cannot be overlooked is financial management. With fluctuating funding, unexpected challenges and the need to maximise the output from limited resources, effective financial oversight is crucial.
For sports charities and governing bodies, here are a few key considerations when it comes to financial management and auditing.
The backbone of sustainability: financial management
Financial management is at the heart of any organisation’s ability to thrive. For sporting bodies, it is not just about keeping track of income and expenses – it requires strategic financial planning to ensure resilience, even when faced with unexpected income fluctuations.
After major events like the Olympics, Paralympics or the Commonwealth Games, many sporting organisations see a rise in exposure and also secure the funding from UK Sport or Sport England for the following 4-year cycle. Despite having the stability of this national lottery funding, there will be a significant period of time before the Games and potentially a delay in corporate support or partnership with these sporting bodies. For many organisations, funding does not always track with inflation, meaning that they are often tasked with doing more with less. This can create substantial challenges when trying to maintain operations during the planning stages and have the right team in place come the delivery of the Games.
That’s where careful financial planning comes in.
To navigate these challenges, sporting bodies should develop a robust financial strategy that:
- Accounts for income fluctuations or static funding - planning for lean periods ensures sustainability
- Maximises existing resources - efficient budgeting helps stretch available funds
- Explores alternative revenue streams - Diversifying funding sources strengthens financial stability.
By implementing a strategy that accounts for these ups and downs, organisations can weather lean periods without compromising their activities or long-term goals.
The role of regular audits
Regular external audits are not only a statutory requirement for sporting organisations under the Code of Sports Governance but they are also an essential tool for identifying risks and inefficiencies before they evolve into serious problems. While major events like the Olympics, Paralympics or Commonwealth Games can create a short-term surge in income, the long-term financial stability of the organisation depends on more than just event-based funding.
Regular audits can help provide a comprehensive review of:
- Controls and processes as part of the audit in which the auditor will ensure that the systems and the controls in place are working as planned
- Sharing the auditors experience of best practices and lessons learnt to ensure value add to the audit assignment
- Forecasting to have an independent party review of the budget, sensitivity analysis and scenario based work used by management to make decisions
- Risk registers which highlights the key internal and external risks to the organisation are appropriate as an independent third party
The next step
In the fast-paced world of sporting organisations, financial management and regular auditing are non-negotiable. Whether you need guidance on budget planning, or compliance, having a trusted financial adviser can make all the difference.
Get in touch with Chris McKain at c.mckain@uhy-uk.com to discuss how we can help.