Independent review of world rowing champs released

27 July 2011

Findings of independent review of world rowing champs released

The Government has today released the findings of an independent review of the 2010 World Rowing Championships held at Lake Karapiro.

Rowing New Zealand (RNZ) was the 100 percent shareholder in the company which ran the world champs, and the event received government funding of $1.5 million, plus conditional funding of $500,000, through New Zealand Major Events (NZME), part of the Ministry of Economic Development.

The event was expected to record a surplus of $500,000, but instead recorded an unexpected loss of $2.2 million and RNZ was forced to seek loans, both from its bank and from the Government, to meet its obligations to creditors.

In February, the Government agreed to loan RNZ $1.3 million, and as a condition of that loan, required an independent review of the event, commissioned by SPARC.

The independent review has found that there were a number of factors which contributed to the loss, mostly relating to shortcomings in governance, inadequate financial management, and less revenue than expected from ticket sales.

SPARC Chief Executive Peter Miskimmin says the review is a stark reminder for everyone involved in hosting major events in New Zealand, including the Government agencies which invest in them.

“Running events is a complex and risky business, and those who take on the responsibility of hosting them must be careful and accountable,” he says.

“Running a major event requires specific skills and expertise around event management. That must be reflected in the governance and management that’s put in place, and the investment oversight.”

The independent review has found there was lack of clarity around roles and responsibilities of the Karapiro 2010 Board, its financial monitoring was poor, and its reporting to RNZ was poor. It said while the event management had strong organisational skills, it lacked commercial acumen and discipline, and appropriate financial scrutiny and financial reporting.

While ticket sales did fall well below what was expected, the review says the sales forecasts for the event were flawed, because of the way management interpreted and used information they received from market researchers.

“The Karapiro 2010 Board was committed to putting on a world-class event, and they achieved that. Operationally the event was a huge success. But the review tells us they were living beyond their means,’’ Miskimmin says.

“The key stakeholders in the event, including the Board, have all proactively engaged and had input into this review, and have provided considerable feedback throughout the process. That’s resulted in what we believe is a very thorough and comprehensive review, and we thank them for their input.”

Miskimmin says the findings of this review will be used to develop additional good practice guidelines for those running future major events, in particular around governance, financial management and ticketing strategies. This will add to the existing Events Resource Bank operated by NZME.

Miskimmin says that throughout this process, SPARC has been working closely with RNZ to ensure the event’s financial problems haven’t disrupted the Kiwi rowing team’s preparation for the London 2012 Olympics.

“It’s been a priority to ensure this doesn’t impact rowing’s high performance programme. That funding is not affected by this. We want our Kiwi rowers to be able to continue to focus solely on winning medals.”

SPARC is the government agency charged with promoting, encouraging and supporting sport and physical recreation in New Zealand. For more information, visit www.sparc.org.nz.

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