Oxford United’s recent reporting of its financial results for the year ending 30 June 2024 was another example of the club putting an extraordinarily positive spin on a dire situation as it posted a record loss of nearly £16m.
The club stated it has ‘reviewed the accounting treatment’ of the new stadium development costs of £1.6m in the 2023 accounts and £5.1m in the 2024 accounts. BUT, what the club fails to mention is the part that FoSB has played in this decision.
In April 2024 we wrote to OUFC to question its treatment of the stadium development costs which were on the balance sheet in the 2023 accounts. Neither OUFC nor its accountants, would engage with us. We therefore made a formal complaint about the errors to the Institute of Chartered Accountants in England and Wales (ICAEW) in May 2024. ICAEW agreed there was a case to answer and admitted the complaint to its conduct and disciplinary process. We remain in correspondence with them.
FoSB’s specialist technical advice was clear: OUFC should have put the new stadium costs in the accounts as an expense. This is why the error in the previously published 2023 accounts had to be corrected, making the loss in that year worse by £1.6m.
How did OUFC manage to make such a significant accounting error?
The club’s CEO, Tim Williams, was previously CFO of Inter Milan and Financial Controller of Manchester United. He was the subject of a 2020 ICAEW article where he is described as an FCA (Fellow Chartered Accountant). How then did he miss the £1.6m error in the 2023 accounts?
Why does this matter?
Part of OUFC’s justification for ‘very special circumstances’ for building on the Green Belt is financial, as described in this extract from the planning statement: “Together the matchday and non-matchday revenues generated would underpin the ability for the club to raise the necessary funds to develop the stadium and ensure the financial sustainability of OUFC owning their own stadium.” This statement must surely be based on financial forecasts, but if the club can’t get historic figures in its accounts right, can it be trusted with complex future predictions? And if, as stated, the club is looking to raise funds to develop the stadium, its bookkeeping which will be subject to due diligence, needs to be dependable.
Spare a thought for the fans:
They continue to be fed a sanitised version of events which puts an unwarranted gloss on situations which are neither ideal, nor what they seem. OUFC’s 2024 accounts explain that “Costs incurred in previous financial years had been capitalised in error...”: This fact was conveniently overlooked in OUFC’s recent statement which mis-represented the accounting error as a change in accounting policy.
Can we trust Oxford United?
We believe that, from the outset, OUFC has deceived councillors and the wider public with its claims that it has to leave the Kassam Stadium in 2026. The club’s current negotiations to stay at the Kassam Stadium for a further two years serve to reinforce our belief. Our exposure of OUFC’s attempt at creative accounting raises further questions around the club’s honesty, even perhaps to its owners who will focus on the ‘bottom line’ rather the detail. Furthermore, with liabilities of £42m the club is technically insolvent making it a perilous business partner for Oxfordshire County Council and potential investors.