community rugby - Australian Sports Commission

CORPORATE SERVICES
CORPORATE SERVICES
84
In last year’s annual report, details of the new Corporate Services
department were outlined and 2005 saw the first full year of its
operations. The only structural change during the year was the moving
of the Strategy component out of Corporate Services. This area now
directly reports to the CEO. With that came the appointment of Jill
Davies as Strategy Manager.
The underlying theme of the department remains as last year - “to
provide a customer oriented service approach to the other units of
the ARU, the Board of Directors and all stakeholders of Rugby in
Australia.”
The structure of the department remains approximately the same as
last year, noting the change of the Strategy function
General Manager
Finance
Legal
HR
IT
Travel
Ashley Selwood
Megan Snape
Janey Draper
Mark Roberts
Andrew Demery
Jo-Anne Ashby
Each of the functions has their own objectives and work plans which
figure back to those of the department. Although a disparate group
of functions, there is an overall requirement of service and support of
the organisation.
Finance
Ashley Selwood
GM, Corporate Services
The Finance department had several challenges during the year with
the departure of Graeme Shearman as Financial Controller adding
to the challenges. Megan Snape as Head of Finance now leads
the department and the enthusiastic group she manages is looking
forward to the improved reporting and control processes being put
in place. Megan joins us from the QRU where she spent four years as
Finance Manager and Company Secretary. Her ability and experience
will be a valuable addition to the team. As mentioned in last year’s
report, the Artarmon warehouse comes under this department
including the management of the very valuable archives and records
management services.
Legal
The Legal department headed by Janey Draper has had a very busy
year as the legal compliance requirements of the organisation simply
grow and grow. As well as managing the many and varied sponsorship,
licensing and hospitality contracts, the department also has a strong
part to play in professional and amateur player issues and polices
as well as provide advice around other corporate and constitutional
requirements.
During the year, the Legal department was heavily involved in the many
drafts for the new Constitution and although the final Constitution is
far from perfect, the outcome was a credit to the Legal department in
what was a very difficult exercise.
As the growth in legal requirements continues, this department needs
to be resourced appropriately, not only to manage the many and
varied compliance issues but also to reduce costs by the reduced
reliance on external legal resources.
Human Resources
As there has been more compliance pressure on the Legal department,
so to has there been on the Human Resources department headed by
Mark Roberts. This area of the business is still relatively new however
continues to provide support to not only the ARU but also to other
Unions. During the establishment of the Western Force franchise, the
Human Resource department spent time with management in setting
up all of the appropriate polices and procedures for the effective
recruitment, employment and management of the required human
resources.
Although staff turnover at the ARU is quite low, the Human Resources
department pays for itself by insourcing all recruitment. With the
overhead being therefore cost neutral, the other benefits that Human
Resources brings in the areas of support, policy generation, training,
OH&S add to the mix. It is hoped that more Member Unions will
be able to use the professional services of the Human Resources
department in future years.
Information Technology
The changes in the IT department have almost been as many as what
the IT industry experiences annually. As the CRM project was finalised
through the appointment of “StayInFront” as the software providers,
there was a need to re-examine the strategy and
structure of the department.
Andrew Demery now heads this department and
after an external review conducted late in the year,
the final structure of the department is currently
being bedded down. Although there has been a
focus on the CRM project over the past two years,
the IT department will now turn its attention to
managing this initiative as well as continue to
improve the process and procedures in the area
of IT. In 2006 there will be an upgrade of both
hardware and software and the team has a very
strong theme in that the ARU wants to be the ‘smart
sport’ when it comes to this area. The advent of the
CRM program is clear evidence of this theme.
Travel
Some people could suggest the Travel department
has had a ‘same old, same old’ year and the fact that it did indicates
another successful year. The fact the department headed by Jo-Anne
Ashby managed another $6 million of travel and accommodation for
the year is clear evidence of the professionalism and dedication of
the staff in this area. The continual pressure of teams both inbound
and outbound, Board, Management and staff travel requirements
continues to grow and the ‘minimum of fuss’ approach by the staff
continues to amaze many. One of the challenges for the team in the
new year is to examine ways through operational efficiency to improve
travel requirements and to look at more economical ways of achieving
outcomes. This challenge should not be a problem to the small but
extremely dedicated team.
Financial Results for the Year
The formal Financial Report is included in this annual report, however
as the accounting profession continues to improve financial reporting,
it is clear to say that the information contained can be confusing to
our members.
Below is a simpler Income and Expenditure Statement, which shows
the final results for the year. As members would be aware, the ARU
Board allocated $18 million out of the RWC 2003 surplus for strategic
expenditure or what is commonly referred to as RWC Legacy Programs.
This amount has and is being spent over the 2004, 2005 and 2006
years and under accounting standards has to be brought to account
when it is spent. In the 2005 year an amount of $5.4 million was
spent for this purpose, hence creating a deficit for the year of $3.2
million. Another way of presenting the results for the year would be
as follows:
($’000)
Revenue 73,288
Expenditure 63,733
Surplus before Allocations 9,555
Allocations to Member Unions 7,356
Surplus for the Year 2,199
RWC Legacy Programs 5,410
Reported Deficit 3,211
Therefore, in fact the surplus for the year based on normal trading was
$2.2 million, which is one of the strongest surpluses achieved by the
Union in its history. Hence, although the Financial Report shows a
deficit for the year, in fact there was a strong underlying surplus.
Capital Management Strategy
Much has been said and written about the Capital Management
Strategy (CMS) of the ARU. In 2004 the Board determined that a
figure of $20 million be retained out of the RWC 2003 surplus for this
purpose. The Board also agreed that it should grow to $25 million
as soon as possible, based on the independent advice received at
the time.
In December 2005, the Board resolved to increase the CMS to $25
million as soon as possible and when that figure is achieved a new
review be conducted to determine at that time what the appropriate
position should be. Therefore, at this stage the aim of the ARU Board
is to grow the CMS to $25 million as soon as possible.
Also, at the time of constructing the $18 million for the RWC Legacy
Programs, in order to achieve a full $18 million, the forecast ARU
surpluses for the years 2004 and 2005 of $2.4 million were
included.
Therefore, in theory, if the forecast surpluses for 2004 and 2005 were
achieved, the $18 million would be fully available to the Member
Unions and the CMS balance at 31 December 2005 would be $20
million.
In fact the CMS at 31 December 2005 is actually $21.7 million with
the additional $1.7 million achieved by way of stronger surpluses
in 2004 and 2005. Therefore, the CMS is in a better position than
originally expected at this time with some way to go to achieving the
$25 million target.
Another way to illustrate the result is as follows:
Net CMS 31 December 2003
Add Projected Surpluses 2004 / 2005
Less RWC Legacy Programmes
Projected CMS 31 December 2005
Surpluses in 2004 & 2005 Greater than Forecast
Actual CMS at 31 December 2005
$35.6m
$2.4m
$38.0m
$18.0m
$20.0m
$1.7m
$21.7m
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Australian Rugby Union 2005 Annual Report