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Rugby Club Missing Money

Rugby Club Missing Money

Hi AW Members

I hope somebody with some experience in this field can help me.

My local rugby club recently had a bar manager / secretary that has been on fiddle for around 14 months.The accounts have will be published showing around £8000 of missing cash. There has also been speculation that people have seen him wheeling barrels of beer to another local pub. He is up for a meeting with the committee tonight to defend his self. The committee don't have a clue what to actually ask him as none are from an accountancy background r have much common sense! As I have just started AAT level 4 and work in a management accounts position, I have been asked to assist them in the meeting. Although I have managed to draw a list of suitable interrogative questions, I am still struggling a bit as I am way out of my comfort zone.

If I get several invoices for different beers, shorts etc and work out the gross profit on each and work out an average gross profit, for example 45%. The current gross profit is 34%. How would I work out the value of missing stock? Would it 45% - 34% = 11%. Then 11% x purchases for year = estimated value of missing stock?

As I've been given the accounts only an hour ago and the meeting is at 7pm, I'm getting my self into a bit of a muddle!

Any help would be very much appreciated, and also if you can point me into the direction of questions that I can ask to relate to the final accounts (I will use the questions and source the data to be more exact) this would also be greatly appreciated.

Many Thanks



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06th Jun 2012 16:04

Missing Stock

I would imagine the best way to do it would be to take the expected Cost of Sales Percentage and work out what the expected Cost of Sales for the 14 months would be (based on actual turnover), then look at the difference between the expected COS and the actual COS. This should be a rough estimate for the value of the missing stock.

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By dreamcatcher
06th Jun 2012 16:18

What about stock takers reports

Several years ago I used to audit quite a few working men's clubs and many of them used to have a third party monthly stock take where the stock taker reconciled purchases to sales taking into account expected wastage, beer in lines etc.

I would certainly ask to see any stock takers reports if they have them.

In terms of 'wet stock' disappearing you seem to be on the right lines by taking an average GP% (in my experience where wet sales only GP% should be around 45% to 55%).  Any massive variation from this and something is not right.  But before jumping to conclusions make sure that the cut off at the year end is correct.

In terms of missing cash if the takings are rung into the till/s and then cash is simply going missing this is quite easy to prove providing you have till reports following cashing up.  If the takings aren't being rung into the till/s then providing missing cash is a little more tricky.

Again from my auditing days we had a WMC in Sheffield where the steward was on the fiddle and in the end the committee insisted on someone from the practice I used to work for attending a cash counting at the end of each week and then reconciling the cash.  Surprisingly the 'missing cash' never happen again after that.  

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By mrme89
06th Jun 2012 16:35




Thank you both for your quick responses.


@Jason -of course its against the revenue figure, thanks for the response.


@Dreamcatcher - it appears fraud is rife in working men's clubs. Another local club was stung for £29,0000 last year and with evidence the police still wouldn't act on it. 

In the rugby club, its not just cash that makes up this cash loss (if that makes sense). Things such as lottery tickets where the jackpots are £300, the jackpots were claimed by unknowns but the revenue from them never materialised. 

The club doesn't do stock takes, something I have told them to do on numerous occasions. I should imagine the accountant has had a difficult time calculating the opening and closing stock without these!

The current gross profit represented as a percentage is 34%, which is what has led me to believe stock has either being stolen or sold at cost to friends. 

Whilst my job tonight is to prepare the questions to present to the ex bar manager, I think I have a duty to point things out to the committee that has allowed this to go on for so long. Thank you for your input.








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06th Jun 2012 16:57

best of luck with the meeting - whilst I've been absolutely no help at all, id be very interested to hear the outcome of tonights meeting.

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06th Jun 2012 17:47

what do you want?

What do you/the club want from tonights meeting? 

I would imagine that any sort of prosecution would be impossible for lack of evidence (see police reaction noted above)

So is it likely that he has resources to allow for him to make payment, if he admits it, or is the best you can hope for is his resignation?

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06th Jun 2012 18:40

Property management company

I bought a flat in a block and I wondered about the admin. It turned out that the owners were taking it in turns and then they all left it to one person. She was supposed to be collecting the money and banking it but it never got banked. I asked everybody what they had paid and there appeared to be about £3,000 missing. I kept asking her to attend a meeting of flat owners but she always cried off or just didn't turn up. In the end I threatened to go to the police and she turned up for a meeting.

She came into my office and the flat owners were sat at a table. She was very nervous. She sat down and immediately one of my cats had been on a tall filing cabinet and jumped on her from behind. She nearly had a heart attack!

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By mrme89
07th Jun 2012 11:06



Just as an update - the meeting was cancelled. 

I forgot to mention that we also think the 'bookkeeper' was involved with the missing money. He could not attend the meeting. Therefore, the meeting has been rescheduled for next week.


I would have had the meeting without him, and held another the following week with him there. At least the bar manager would have been dealt with.


In terms of the stock that I thought had gone missing - there is roughly an 9% difference in GP on a turnover of £170,000. 

It seems more things are coming to light, in fact too much to post on here.


At the end of all this, I think the committee will have more questions to answer as they literally have no controls or systems in place to prevent incidents like this happening. He has had a licence to print money for over 12 months and the committee has allowed it through negligence.


@PeterSaxton - That made me laugh! I may have to take my cat to the meeting next week!


mn2taxhbj - All the committee wants from the meeting is the bar manager & bookkeeper barred for life, and to try and stop them been in the same position for another club. We have no chance of recovering the money, the only thing we can get from this is to ensure that he has a bad reputation to not do the same to another club. The thing I really want to achieve is for the committee to learn a big lesson and put controls place so that this doesn't happen again. I am a member of the club and only want it to succeed. 


Thanks again for everyone's input. 

I will keep you updated once we have had the meeting.


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to tom123
08th Jun 2012 13:03

Missing stock


I read your notices with interest, as I was in a similar poritition myself, some years ago.  A members club was run on a voluntary basis, and it always appeared the till was ok.  It took quite a considerable time before they realised stock was going missing, but were lucky that the brewery provided a loan which enabled them to continue trading.   A lot was learned from this experience, A treasurer was appointed (which is where I came in), and voluntary workers were not allowed to serve.  I found the whole issue is quite sensative, because if you find stock is going missing it can be difficult to know who the culprit is and the last thing you would want is to accuse the wrong person.  The procedure we introduced was as follows:   A proper till was installed, which gives daily or weekly reports on how many voids, what time the employee logged onto the till and what time logged out.  A report of takings at requested time frames.   Also a screen was installed so that the member could ensure the correct amount was being paid.  We then employed a stocktaker to complete a stocktake every 3 months, as an annual one leaves it too long for a problem to exist if there is one.  This stocktaker has his own access to the till from his office, so we can contact him if we have problems we cannot find the answer to.   When the stocktake is due I present my trading figures taken from a weekly report which is completed by the steward, and supported by till receipts.  I also provide my figures for the costs of goods sold.   Ideally when he gives me the closing stock value our gp% should agree.  He can also provide us with a breakdown of wastage.   We ask the cellar man to complete a report for any wastage when cleaning the pipes.  The staff are allowed 2 free drinks which they have to record.  In a nutshell if it does not go through the till, it has to be written down.  Saying all this we have had a stock problem of late, but with this procedure in place we have been able to 'nip it in the bud'.  I hope this helps.Ann

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07th Jun 2012 11:09

Lots of analysis in no time

These clubs have a lack of control , no supervision or segregation of duties which is why these people have a free for all.

GP there will be lots of %ages involved.

Take stock purchases for each spirit / beer and dry trade then compare to selling price to work out gross profit percentage, after allowing for wastage. May still be difficult to nail down if you have no regular stock takes....added to which the experienced dodger will refill the optics with stock from the supermarket so will not appear on purchase invoices, even if they are all there.

Tonights meeting? you do not have enough time to do a proper analysis and wading in with unsubstantiated allegations at this stage will not be useful.

I would use tonight as a fact find, but if the guy is employed you need some HR advice...Is there not an accountant or solicitor within the club that could help manage this for you.

I have been there! You will be stuck in the middle and it will be a very unpleasant experience.

Prevention is definately better than a cure in these cases.


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07th Jun 2012 11:43


First you have to come up with the facts. Using till receipts and purchase invoices and taking a stock count may provide some evidence about how much stock is missing and how much cash is missing but I don't see how you can blame anybody for the missing stock if you don't have an earlier stock count.

How can you prove they have stolen anything and it's not just incompetence?

I don't think you can publicise this to stop them getting other jobs.

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By mrme89
07th Jun 2012 11:58

@PeterSaxton - He did this self-employed along side his full-time job. We have no intention of going to his employers, we just don't want him apart of the rugby community. 


We have evidence of the cash going missing, this is why we are having this meeting. There are hand written cash receipts for bands @ £150 per time but we have never had a band! My brother was paid £60 on a Saturday to do the DJ, the receipts from the bar manager show £90. There is plenty of evidence without having to speculate.


In terms of the stock, he's on cctv wheeling barrels out to another pub. The GP calculation was just for an estimate to as how much (more out of my interest to be honest).

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07th Jun 2012 12:05


I don't see why you shouldn't threaten them with the Police or ask them to repay the amount stolen.

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07th Jun 2012 12:06

Then concentrate on that evidence

Rather than constructing more, that a hole can be blown through?

That is simple theft and false accounting I would involve the police.

Let them sort out the amount.

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By mrme89
07th Jun 2012 12:13

Like I said previously, another club had the auditors in and they proved the steward to have stolen £29,000. The police wouldn't act on it, despite numerous efforts to get them involved. I can't see why the would get involved in this when not as much money is involved.


I can't see him repaying any money, any money he benefited from the club will now be gone. 



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07th Jun 2012 12:16

Don't give up so easily

There's plenty of police who are too lazy to get involved in investigating crime. If that happened to me I would get my MP involved.

The money might be gone but does he have any property? If so, he could increase his mortgage or get a secured loan.


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07th Jun 2012 12:40

He is self employed?

As a bar manager with the club. I wonder what a payroll inspector would say about that

Let me guess, no contract and paid in cash?

Doubt the police would be interested, doubt even you could construct a case that would stand up even in a civil court  - he could have lent the barrels to a local pub (it happens) The GP although too low for a pub may be correct for a rugby club - that GP margin is not unusual in a working man's club  

Be careful, there are all sorts of pseudo employment/dismissal issues bubbling under here.

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07th Jun 2012 13:00

Other issues

Have you considered if the VAT position is correct? The fact that the proceeds were stolen (possibly) does not matter a damn to HMRC who will still want their cut. This could potentially be a serious issue alongside the interesting "self employed" bar manager position that worst case scenario could lead to PAYE/NIC due.

I concur that you will have a hard time interesting the police in this but unfortuntely HMRC may still come looking for their pound of flesh.


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By mrme89
07th Jun 2012 13:12

I never thought about contacting the local MP, that may be a route to go down.


The accountant that did the final accounts also recalculated the VAT liability - this has now been settled.

PAYE/NIC - I think they will have to cross that bridge if and when they come to it.


The GP should not be as low as this. They are not tied into to a brewery, they don't have a brewery loan and are free to buy stock from wherever they please.

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07th Jun 2012 13:40

AAT Level 4



You say you have just started your level 4, sounds like the perfect case study for your report.

I completed my AAT last year and as I'm in practice I had to do my report on a case study rather than a real life situation.



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08th Jun 2012 11:06

Personally I'm surprised that in a rugby club, full (presumably) of hulking great rugby players, that this even got this far! Not that I'm suggesting anything other than a "peaceful and civilised" settlement to the matter you understand! But in my experience rugby players who have been "done over" tend to operate on the principal that "I can fix that ... come 'ere you!"



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By Tony S
08th Jun 2012 11:57

Sounds like they need a good Treasurer...........

I am the treasurer of our local Rugby club and am more than aware of the dangers involved in these organisations.

I am extremely sympathetic with your situation but try not to get too worried about this. The responsibility to sort this out rests directly with the officers of the club; the Chairman, Secretary and Treasurer (or Directors if it’s a LTD company).

It appears you have plenty of evidence so I would advise the Club (not you) to present this to the bar manager and bookkeeper at the meeting. Ask them for an explanation or the Club will go to the Police and both should be suspended from their positions immediately whilst an investigation is conducted.

Going forward you need to draw up a set of controls and measures to ensure this can never happen again. As suggested above segregation of duties is key. I go down to our club at least once a week (never at the same time) and check the bankings match the till rolls. Also prohibit any cash payments (or put a small limit on them) unless auithorised by a committee member and a receipt obtained.

I am unsure what exactly your relationship is with the Club, but its sounds like they need a decent Treasurer (it will look good on your CV!). 

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08th Jun 2012 12:19


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08th Jun 2012 12:57


If I were you, I would not recommend that your volunteer your services as Treasurer - be assured it is an utterly thankless task especially where you are trying to introduce a proper control system & procedures.

Some clubs/charities are better than others and may appreciate your work but others will fight against you at every turn - the managment commitee (or one particular member of) who insists that it is better to pay £50 cash for cleaning than having to set up a payroll and do it properly for instance.

I know this attitude is unhelpful & selfish, but it is certainly something that I would not do again myself.

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08th Jun 2012 14:08

moving forwards.....

monthly stocktaker fees are around £80 so it is hardly prohibitive (maybe double at year end to count stock/takings back to a specific date).  also, they will calculate the individual GP per type of drink as well as the overall GP (both expected and actual).


do the club know the overall GP with any certainty? - you seem from the initial post to be working on a number of lines and then just taking the average without regards to the sales volumes (eg most popular lager could be 40% and account for 70% of sales, malt whisky 60% GP but only 1% of sales).


also, you would be surprised at the wastage costs, particularly line cleaning - can savings be made by cleaning the lines every 9/10 days rather than weekly?


does the club have one of the "card" style lottery machines - watch for winning cards being "regurgitated" (I insist they are retained by the bar, to prove the weekly payouts, then hole punched or similarly defaced - defaced tickets subsequently not accepted for refund without good reason). keep a running record of weekly takings and payouts to give a decent indication of the profit over time for comparison with the anticipated return.


make sure the people counting machine takings etc are rotated regularly so the same individual doesn't have a monopoly on it (ideally 2 people per count and rotated regularly) - keep a spreadsheet of weekly takings and work out the average per counter. again, could identify lower average counts for certain individual(s) - gives an indication of who to watch.  



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By mrme89
08th Jun 2012 15:57

I'm overwhelmed with the response to this thread, thank you for all that have commented..

I agree it's a thankless task to be a treasurer, I have already been offered this position but have politely declined. I also have my studies to concentrate on so would not be able to dedicate the time needed to drive the club forward.

When the meeting is held, I will not be involved in any decision making ... that responsibility lies with the committee. I will only be there to ensure the correct questions are asked.

The only thing I will be involved in going forward is helping them set up and adopt controls and procedures to try and prevent this happening again. Luckily I have had the week off so have had plenty of time to start this!


@ Casper007 - Thanks for your comment. I will bear some of these in mind when writing up the procedures. 

@ sjmaccounting - I had never thought of the same winning tickets regurgitating, this is something I will investigate further. Also, I have had a quote today for the stocktaking (£90), I think this is quite reasonable.

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By Tony S
to tom123
09th Jun 2012 10:06

Yes it is a thankless task being a Treasurer. But my point about it looking good on your CV is extremely relevant.

Being a Club Treasurer requires a huge amount of time, dedication and community spirit; most potential employers would recognise this. Also you would benefit enormously from the personal and professional development opportunities. Having to regularly present financial information at meetings, developing systems and controls for non finance staff, dealing (assertively if necessary) with members of the club/committee who seek to avoid Tax/NI/VAT (as in Roland’s example)  


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08th Jun 2012 17:53

Club VAT Returns

As Roland 195 says - check the VAT.  If you look at (previous to current admin) Returns it should give you an idea of average profit margins/turnover.  We had two really  well supported quite large clubs in my area go down because no one was interested in the admin of the club and the treasurer  scarpered with cash, no Returns had been done for about a year and there was no money to pay the VAT when the missing Returns were calculated.  Its a thankless task to be an (honest) treasurer.  I always refuse the job.


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