Prestigious tennis club to investigate missing millions
Save articles for later
Add articles to your saved list and come back to them any time.
One of Australia’s most prestigious tennis clubs has called in external auditors to examine a $2.4 million loss from its club dining and functions operations.
The exclusive Kooyong Lawn Tennis Club, which boasts high-profile supporters including former treasurer Josh Frydenberg, shocked members last month when it was announced the club suffered an overall loss of just over $960,000 for the year.
Kooyong Tennis Club has been forced to call in external auditors. Credit: The Age
The prestigious venue, known as the “spiritual home of Australian tennis”, had managed to turn profits during the pandemic despite lockdown restrictions.
The club’s loss-making year has now led to the early departure of the club’s chef and the unusual move of calling in an external auditor to review its books.
Club president Adam Cossar confirmed to this masthead a chef had resigned over what Cossar described as “the food and beverage issue loss”, but said there was no suggestion that funds had been misappropriated.
“The board has approved the appointment of a firm to conduct an independent review … to investigate exactly how this, in absolute terms, come to bear,” Cossar said.
The club’s financial position was raised at Kooyong’s annual general meeting last month, when the executive team revealed that despite an increase in memberships and record operational levels, Kooyong had posted a loss of $962,652, a seven-figure swing from the previous year’s $980,000 profit.
The Kooyong treasurer’s official explanation in the annual report attributes the cost blowout to catering and staff costs. The report also noted that the club’s long-time CEO, Chris Brown, would undertake a review of the catering department.
At the AGM, members were informed that external auditors would be brought in to review the club’s finances, and the outcome of that review would be shared.
Cossar said a short list of accounting firms to front the task was under review by the club’s three-person financial, audit and risk committee.
The accounts show that overall, the members’ dining and functions component of the business went from a profit of almost $330,000 for the 2022 financial year to a loss of $2.48 million the following year.
The food and beverage section of the accounts reveals a near doubling of total expenses for the year to $10.96 million.
The accounts show a 155 per cent increase in food costs to $4.18 million. Comparatively, food revenue increased by just 43 per cent to $6.29 million. Staff costs jumped 77 per cent to $2.5 million.
While the president said some of the dramatic increases in these costs could be explained by staffing, COVID interruptions and inflationary pressures, he conceded that an independent audit was required to investigate further.
Cossar also sent a follow-up letter to members after the Herald Sun reported on the club’s dire finances in October.
“I am aware of concerns raised by members following the recent AGM and subsequent incorrect reporting regarding the club’s annual accounts,” he said in the letter.
“I need to re-affirm my and the board’s position that there is no evidence of ‘misappropriation’ of funds and that the club has incurred an accounting loss as reported at the AGM and as documented in the 2023 Annual Report.”
He added the board was committed to returning the club to a “profitable operating position”.
Once the home of the Australian Open, council records value the sprawling tennis club located in Melbourne’s eastern suburb of Kooyong at $63 million. The club’s 8700 members added $10.7 million to the club’s balance sheet this financial year, with most paying more than $1000 in membership fees annually.
During the past financial year, the club chewed through $300,000 from its cash reserves, but it still has current assets of almost $3 million and total net assets worth almost $90 million.
Sports news, results and expert commentary. Sign up for our Sport newsletter.
Most Viewed in Sport
From our partners
Source: Read Full Article