OIympics Budget Cat Is Finally Out of The Bag

The Department for Culture Media and Sport (DCMS), and the rest of the government, are less than pleased that the true costs of the Olympics £12BN (including £2BN running costs) has finally hit the headlines of the mainstream media.

The Telegraph reports that Jonathan Stephens, the senior civil servant at DCMS, has written to Margaret Hodge (Chairman of the Public Accounts Committee) to complain about the fact that PAC have quoted a figure higher than the £9BN sanctioned by the government and dutifully reported by the MSM.

The £2BN running costs will come from the taxpayer (therefore it is a cost). However, the government is so keen to keep the headline figure below £10BN (a psychological breakpoint) that it is using an accounting fudge to hide the extra £2BN (by claiming some monies will be recouped, and others are not "Olympic costs").

Smoke and mirrors will no longer hide this con trick, the budget cat (reported here in 2007) is finally out of the bag and about time too!


Olympic Medals won during the Beijing 2008 Olympics

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Beware Betting Scams

As noted many times on this site, the Olympics is more about money rather than sport.

The IOC is concerned that the London Olympics 2012 will be subjected to betting scams/corruption/fixing and, as such, will be monitoring betting patterns.

Olympic Medals won during the Beijing 2008 Olympics

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Countries Tout Tickets

In a rather amusing development, the IOC has all but accused four (albeit unnamed) countries of touting tickets for the recent Vancouver Winter games.

National Olympic Committees (NOCs) receive a quota of tickets that they can sell to the public in their home country. However, some NOCs have been in the habit of passing the tickets on to touts for profit.

Gilbert Felli, an IOC director, has stated that four countries would be punished (they will receive a reduced ticket allocation for the London games) for the way in which the sales of their Vancouver allocation were handled.

Olympic Medals won during the Beijing 2008 Olympics

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Scammers

The Telegraph reports that over £2M was defrauded from thousands of Olympic fans by way of an internet ticket scam in 2007.

Allan Thomas Scott, Gerardus Petrus Paulus van Meer and Terence Shepherd (involved in the internet company Xclusive Leisure and Hospitality Ltd) were found guilty of deceit and conspiring to injure by unlawful means. They were also made personally liable for the company's debts.

Needless to say, despite these people being caught, other scammers will be hard at work in preparation for the London games.

Olympic Medals won during the Beijing 2008 Olympics

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Groundhog Day For The LDA

It seems that all is not well in the London Development Agency (LDA), the body tasked with ensuring that there is some form of meaningful legacy from the 2012 London Olympics (aside from the burnished glow of politicians' egos).

The LDA auditors, audit committee and new finance director met at the LDA's audit, risk and performance committee last week. During this meeting, according to Accountancy Age, concerns were raised about the LDA's ability to file its next accounts on time.

Hardly stellar performance from what is meant to be a "professional" organisation!

However, this lack of professionalism should come as no surprise. The Audit Commission for the last two years running has criticised the poor quality of the LDA's accounts.

The reason that the LDA probably won't file its accounts on time is because (according to its CFO Ian Grattidge) it lacks technical accounting ability, and needs deeper financial understanding embedded within its business.

Grattidge is quoted by Accountancy Age:

"I want to see financially literate people across the business."

As with all Nu Labour projects, the quality of Olympics spin was always high. However, the technical abilities of those actually entrusted with delivering the spin sadly lacking.

Good luck to Grattidge, this smacks of Groundhog Day; as these issues have been raised before, without satisfactory resolution.

Olympic Medals won during the Beijing 2008 Olympics

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Cuts

As the old saying goes:

"Famine follows Feast"

Therefore we should not be surprised to learn that in the wake of the £160M blackhole, discovered in the accounts of those allegedly "in charge" (LDA) of the London 2012 Olympics, cuts have to be made.

Projects intended to deliver a legacy of the 2012 Olympics have been cut by the London Development Agency. There will be cuts of over £21M this year affecting 2012-related programmes run by the LDA.

Olympic Medals won during the Beijing 2008 Olympics

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The £160M Black Hole

In June I noted that:

"a £100M black hole has appeared, as if by magic, in the 2012 Olympics accounts of the London Development Agency (LDA) - the budget for which is not included in the £12BN Olympics budget".

Unfortunately, it seems that the size of this black hole has increased by over 50%.

The Times has obtained the unpublished report by KPMG into the black hole, which states that the black hole has expanded to £160M.

Unsurprisingly the report, according to The Times, "hints at a cover-up by officials who waited more than a year before alerting senior managers to cost overruns".

A £1.4BN compensation deal was agreed with businesses who were forcibly removed from the Olympics site. However, approximately 70 firms have yet to receive their money.

Seemingly the LDA has not set aside enough to settle the outstanding claims.

KPMG noted that staff in the Olympic Legacy Directorate, the department in charge of the scheme, should have been aware of spiralling costs as early as April 2008.

Neither the person overseeing the budget nor his finance manager were qualified accountants. A remarkably inept arrangement, even by the standards of the Labour government and the London Labour administration (under Ken Livingstone) at the time.

The report states:

"The basic requirements for managing and accounting for a budget were not met. None of the senior officers of the LDA to whom we spoke accepted responsibility for checking the accuracy of the accounting information."

It would seem that those "in charge" of the Olympic finances couldn't "run a piss up in brewery", and then did their best to try to hide their failings. Hardly surprising that the budget for this Labour "ego fest" has ballooned from £3BN to £12BN (including £2BN running costs).

BTW, isn't funny how those "in charge" conveniently forget to add on the £2BN running costs whenever they talk about the costs?

For why?

They are trying to keep the headline figure reported in the media below the psychological break point of £10BN.

Unfortunately for the politicians, they will learn that the trouble with black holes is that they just keep growing.

Olympic Medals won during the Beijing 2008 Olympics

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Kickbacks?

Lord laird has set the cat among the Olympic pigeons by questioning the integrity of charter deals for a fleet of boats intended to be used for corporate entertainment, media, accommodation and other purposes for the London 2012 Olympics.

Lord Laird has asked the Government to investigate whether Olympic officials were offered or requested "financial and other inducements, including vacations, periods of stay or trips on sea-going vessels for individuals and their family members".

Lord Laird named two British boat-charter companies (Top Sail Events and Charters Ltd) and has asked whether directors or staff members working for the Olympic Delivery Authority, the London 2012 Organising Committee (Locog), the Olympic board and the British Olympic Association had received or asked for on-board hospitality.

I wonder what has prompted Lord Laird's question?

Olympic Medals won during the Beijing 2008 Olympics

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Cuts

Over £20M per annum, for the next 3 years, will be cut from the London budget to cover irregularities in the 2012 Olympics accounts.

The black hole (estimated at being between £60M-£100M) in the accounts means that the London Development Agency, the Mayor of London's economic and business unit, does not have sufficient reserves to cover compensatory commitments owed to businesses forcibly relocated from the Olympic Park.

KPMG are conducting a forensic investigation into the irregularities, and will issue a report at the end of July.

Olympic Medals won during the Beijing 2008 Olympics

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Lost!

Despite continuous assurances from those "in charge" of the London Olympics, and their political masters, that everything is under control (despite a rise in the budget from under £3BN to £12BN) it seems that £100M of taxpayers' money has been "lost".

A £100M black hole has appeared, as if by magic, in the 2012 Olympics accounts of the London Development Agency (LDA) - the budget for which is not included in the £12BN Olympics budget.

A routine audit of the accounts has uncovered large accounting irregularities, and a team of external accountants from KPMG has been called in to investigate the "lost" money.

Gareth Blacker, who oversaw the purchase of the huge Olympic site on the Lea Valley, and his accountant have been suspended. No evidence of wrongdoing is attached to either Mr Blacker or his accountant.

A source told The Times:

"This has gone beyond a routine audit, into the realms of a fraud investigation".

This gives me little faith in how our £12BN Olympics' budget is being "managed".

Olympic Medals won during the Beijing 2008 Olympics

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www.olympicsdiary.com brought to you by www.kenfrost.com "The Living Brand"

Alleged Ticket Fraudsters Arrested

Five people from London have been arrested for their involvement in an online ticket fraud for the Beijing Olympics.

Since September the Metropolitan police have been investigating complaints about the failure by companies to supply at least 4,000 tickets for the Olympics and music festivals in the UK.

Xclusive Tickets Limited, Xclusive Leisure & Hospitality Limited are alleged to have sold tickets online for a wide variety of events including the Olympics.

Olympic Medals won during the Beijing 2008 Olympics

Don't forget to visit www.theolympicswarehouse.com
www.olympicsdiary.com brought to you by www.kenfrost.com "The Living Brand"

Cometh The Games, Cometh The Scams

Much like flies around shit, scammers and con artists are attracted to large cash rich events.

The forthcoming London 2012 Olympics will prove to be no exception to that rule.

Event though there are still four years to go until the London Games, police have been already been put on alert for widespread fraud. There are reports circulating of websites offering fake tickets and "boiler rooms" selling shares in companies with fake games contracts.

In response to the threat, City police and Scotland Yard have joined forces and published a document entitled "Policing the Olympic Economy".

Unsurprisingly the police are asking for money, £5M in fact, to help prevent frauds such as procurement corruption, currency counterfeiting and cheque and credit card crime.

The Olympic pot of gold attracts everyone!

Olympic Medals Won

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